According to research by The Spectator, the Federal Government spent $112.35 million in January 2023 paying down overseas debt.
According to information from the Weekly International Payments report published by the Central Bank of Nigeria, the amount spent in January was $146.17 million more than the $45.64 million spent in December 2022.
This happened when the Federal Government worked to increase its income base despite obstacles.
The Federation Account Allocation Committee distributed N750.17 billion to the three levels of government in January 2023, according to a previous story by The Spectator.
The amount is down N240.02 billion from the N990.19 billion given in December 2022.
Nigeria paid $2.4 billion in 2022 to service its external debt, a little increase over the $2.11 billion spent in 2021.
The Federal Government withheld almost N78 billion from allocations given to the states for settling their foreign debt, according to The Spectator.
This was based on information from the National Bureau of Statistics’s publication of the Federation Account Allocation Committee Disbursement Reports.
From the Federation Account allocations allocated to state governments in 2022, the deductions were made.
The legislative structure that governs the federation account now permits money to be distributed among three key categories: statutory allocation, Value Added Tax distribution, and derivation principle.
The Spectator said that Lagos was the state worst hit by the withdrawals, with roughly N23.61 billion being taken out for foreign debt payment in 2022.
Following it were Kaduna, which had N10.25 billion removed, and Cross River, which had N7.56 billion deducted.
The Federal Government expects to spend 82% of its revenue on interest payments in 2023, according to latest data from the International Monetary Fund.
The IMF projects that foreign debt, including private sector debt, would increase to $121.6 billion, while external reserves will increase to $37.5 billion.
This was stated in the document’s “IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary,” which included a table of forecasts.
According to the forecasts, less money would be utilized by the government to pay interest, with the percentage dropping from 96.3% in 2022 to 82.3% in 2023.
In addition, it said that in 2020 and 2021, respectively, interest payments were 86.1% and 87.8% of the federal government’s revenue.
