FG spends N1.1trn on debt servicing in 9 months

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…Says revenue drops 60% in Q3, 2016

From Juliana Taiwo-Obalonye

The Federal Government Tuesday, disclosed it spent N1.094.22 trillion on debt servicing between January and September 2016.

It further said that the net oil receipt dropped for the third quarter in 2016 by 66.6 per cent to N2012.37 billion as against N603.53 billion in same quarter last year.

But government has, however, pledged to strengthen sectoral policies that will boost monitoring and evaluation framework in all its Ministries, Departments and Agencies (MDAs) for effective project delivery. The disclosures were made at the high level meeting on Promoting Effective Policy Monitoring and Evaluation of MDAs in the implementation of the 2017 budget, at the State House Conference Centre (Old Banquet Hall), Presidential Villa.

The Minister of State for Budget and National Planning, Zainab Ahmed, said at the segment of the presentation of Budget Implementation and Performance Monitoring Report of 2016 third quarter, that the sum of N1.044 trillion was used for local debt servicing as against the N980.55 billion budgeted in the 2016 spending plan, an indication that government spent N63.45 billion above its target for debt servicing. She added that the sum of N50.22 billion was spent for external debt servicing indicating some N9.36 billion increase from the N40.86 budgeted.

The Debt Management Office (DMO) had last year said government planned to spend 35 per cent of its N3.86 trillion forecast revenues on debt servicing, up from 26 per cent in 2015. Government had also planned to borrow $5 billion to finance a record budget deficit of N3 trillion.

According to DMO, the Federal Government domestic debt stock as at September 30, 2016, reached N10,845.22 trillion while external component, which the DMO said were mostly low interest funds from multilateral financial institutions stood at $11.583 billion representing an increase of $320.70 billion (or 2.85 per cent) from external debt stock in the second quarter of 2016 and an increase of $965.24 billion (or 9.09 per cent) over the $10,618 billion documented in the third quarter of 2015.

Quoting DMO data, Ahmed said, “the increase in the external debt stock in the third quarter of 2016 was due largely to the rise in non-Paris Club Bilateral Debts drawdown.”

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