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Debt servicing to gulp N8.25tn of Nigeria’s 2024 N26tn budget— Minister

Published

1 year ago

October 17, 2023

Following the holding of its second Federal Cabinet meeting since May yesterday, the Nigerian government has revealed plans to spend 61.63% of its 2024 budget on personnel and debt service costs.

Nigeria’s Minister of Budget and National Planning, Abubakar Bagudu, made the revelation to State House Correspondents after the Federal Executive Council meeting at the Presidential Villa, Abuja on Monday.

“The aggregate expenditure is estimated at N26.01tn for the 2024 budget, which includes statutory transfers of N1.3tn non-debt recurrent expenditure of N10.26tn. Debt service estimated at N8.25tn as well as N7.78tn being provided for personnel pension cost,” Bagudu said.

Bagudu explained the reason for the higher debt service, stating that it was “because N22.7tn Ways and Means was securitised, meaning it became a Federal Government debt at nine per cent.” Also, as a result of transfers from the agreement between the Federal Government and Organised Labour, personnel costs increased significantly, he added.

According to him, personnel and pension costs of N7.78tn and the debt service cost of N8.25tn make N16.03tn out of the N26.01tn 2024 budget. Also, the amount budgeted for personnel and pension costs is expected to increase from N5.87tn in 2023 to N7.78tn in the 2024 budget.

Concerns about lowering the cost of governance led to an increase of N1.91 trillion (32.54%) in this figure. A 30.74% increase in debt servicing costs from N6.31 trillion in 2023 to N8.25 trillion by 2023 is also included in the plan.

The Federal Government spent more on debt servicing and personnel costs in 2022 than it did on all other expenses combined, according to a June 2023 World Bank report.

According to the government, its projected expenses for the fiscal year 2024 total N26.01 trillion. From the N21.83tn allowed in 2023, this represents an increase of 19.15%.

In order to ensure that the 2024 appropriation bill is ratified before December 31, 2023, the FG reaffirmed that the administration will retain the January–December budget implementation cycle.

Related Topics:Debt Servicing Featured Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 day ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.