Yemi Adedeji, Abuja
BudgIT, a non-governmental organisation monitoring the performance of budget in Nigeria has warned that the federal government may be tilting the balance of the economy toward a debt crisis as debt serving is already growing faster than government projections.
The organisation said it is shocking to note that oil revenue which stands at N1.59tn can barely service the accumulated debt of the federal government, stressing that government is not setting aside funds to pay down maturing debt- as no money was put
into the sinking funds in the first nine months of 2017.
BudgIT made this known in its report on the level of Budget implementation for the first nine months of 2017, noting that the report reinforced it earlier projections during the analysis of the executive budget proposal that revenue productions underpinning the federal government fiscal plan is grossly overly optimistic.
According to the report, ” the Federal government has however raised approximately 81% of new debts projected for the fiscal year in the first nine month reinforcing that FG’s borrowing plan is achievable for fiscal year 2017.”
It added: “Given that only N377.02bn has been spent on capital items despite borrowing N1.91tn, the federal government may be tilting the balance of the economy toward a debt crisis as debt serving is already growing faster than government projections.
” It is disheartening to note that the federal government is borrowing to meet its recurrent expenditure obligation rather than injecting same in the flat economy.
“However, Non-oil revenue now account for 53.6percent of federal government revenue in the first nine months of fiscal year 2017.
It is imperative for the government To be more transparent and accountable of government if the goal of government to accelerate non-oil revenue growth as contained in the economic recovery and growth plan is to be achieved,” it said.
The report explained that federal government budget for 2017 was anchored on oil revenue projections of N2.12tn; adding that as at September 2017, total revenue from the oil sector which accounts for about 10% of Nigeria’s gross domestic product arrived at N749.92bn.
It revealed that the actual oil revenue collected was only 47% of the N1.592tn expected between January and September 2017 despite oil trading significantly above the budget benchmark price of $42.5 per barrel.
It said the shortfall in oil revenue can be connected to production numbers which averaged about 1.99million barrel per day as against the budget estimate of 2.2million barrel per day.