Nigeria’s Central Bank released data highlighting a significant challenge for the government’s finances. In the first quarter of 2024 (Q1), the federal government earned just N1.76 trillion. However, a substantial Portion N1.31 trillion, went towards debt servicing, representing a concerning 74% of the revenue collected. The Central Bank of Nigeria’s latest Quarterly Statistical Bulletin reports. This is alarming and confirms that the Nigerian economy was in a dire position.
This raises concerns about the government’s ability to invest in crucial areas like healthcare, education, and infrastructure as it is currently too broke to do so. A high debt burden can limit resources available for public services and economic development.
Breakdown:
• Debt Service: 74% of Q1 revenue was used for debt servicing, indicating a significant financial commitment.
• Revenue Growth: Despite the high debt servicing cost, retained revenue increased by 33.8% compared to Q1 2023.
• Spending Cuts: Government expenditures decreased by 12.9% in Q1 2024 compared to the previous year, potentially due to cost-cutting measures.
• Reduced Deficit: The fiscal deficit in Q1 2024 dropped by 29% compared to Q1 2023, suggesting some improvement in managing the budget gap.
Overall, the data presents a mixed picture. While a high debt burden remains a challenge, spending cuts and revenue growth offer some potential for improvement.
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