The economy of Nigeria is greatly damaged in the first four months of the year as the cost of repaying debt surpassed the government’s revenue in the first quarter of 2022.
The details of the 2022 fiscal performance report for the first quarter shows that Nigeria’s total revenue between January to April was N1.63 trillion while debt servicing stood at N1.94 trillion, which means that there is a difference of over N300 billion.
Speaking on the development on Thursday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, owarned that urgent action is needed to address the fiscal crisis at all levels.
According to the report, oil revenue didn’t perform well as a result of high production shortfall caused by pipeline vandalism and crude oil theft. She also cited high petrol subsidy cost due to higher landing costs of imported products.
“Revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipeline vandalism, the report said. It added that there is also seasonality to some of the non-oil taxes, which means that the nation expects to collect significantly more in the second half of the year.
“The improved revenue collection should also moderate the Debt Service to Revenue ratio, which is currently above our target level,” the report said.
She added that e expectation of improved revenue collection should also solve the challenges of debt servicing.