The Federal Government says Nigeria’s high debt service to revenue ratio is high due to the large expenditure base of the country.
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The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who revealed this during an interview with Bloomberg on Friday, October 16, 2021 said that the Federal Government was working to increase revenues and reduce expenditure.
She said, “Our debt service to overall revenue is high because we have a very large expenditure base. We have a large proportion of our budget dedicated to payroll, and Mr. President had decided from the beginning of his administration that we were not going to disengage staff.
“So, you have to pay salaries, you have to pay pensions. And also, we have to fund the other arms of government, which are the judiciary and the legislature.”
According to the Minister, revenues were growing but expenditure grew at a much faster rate.
“So, we do have a revenue problem. And we are working to curtail expenditure by being able to limit agencies’ expenditure to 50 per cent of their revenues,” she said.
She said the country could approach the foreign capital market again this year, considering the success of the last bond it raised.
