The Debt Management Office (DMO) has disclosed that Nigeria spends 34.2 per cent of her earned revenues on debt servicing as at June 2017
The Office in a document entitled ‘Nigeria’s Public Debt – Some Recurring Issues’, which clarifies the country’s spending on debt servicing stated that as at June 2014, debt servicing accounted for 34.02 per cent of revenue, up from 33.94 per cent recorded as of December 31, 2016.
It stated: “While the debt service to revenue ratio was 33.94 per cent as of December 31, 2016 and 34.02 per cent by June 30, 2017, the government is conscious of the need to bring this ratio to a much lower level in order to make financial resources available for priority projects.
“Indeed, this explains why the government has been making conscious efforts to increase the revenue base through initiatives for improving collection by the Federal Inland Revenue Services, the Nigeria Customs Service as well as the Voluntary Assets and Income Declaration Scheme”, DMO added.
Although the agency did not make further analysis of the debt servicing ratio in the document, available statistics indicated that the country committed about N1.24 trillion on domestic debt servicing between January and September last year compared to the $383.45 million used to service external debts.
When analysed within the context of total revenue accruals during the period, the above figures showed that at a debt servicing ratio of 34.02 per cent, the country must have generated a total revenue of N3.99 trillion in the three quarters ended September 2017.