The Nigerian fiscal space had the economy crawling and reeling under huge debt impacts and rising petrol subsidy. The latest data released by the Debt Management Office (DMO) showed the total Public Debt Stock, representing the Domestic and External Debt Stocks of the Federal Government of Nigeria (FGN), the 36 State Governments, and the Federal Capital Territory (FCT), was N42.84 trillion ($103.31 billion) as of June 30, 2022.
The comparative figures for March 30, 2022, was N41.60tr ($100.07bn). The Total External Debt Stock was $40.06bn (N16.61tr) as of June 30, 2022, while the Total Domestic Debt Stock was N26.23tr ($63.24bn) due to new borrowings by the FGN to part-finance the deficit in the 2022 Appropriation Act.
Even with these huge debts, Nigeria still burns over N300bn monthly on petrol subsidy through a process that many commentators have said is corruption infested.
Nigeria’s federal government had a total of N17.126tr budget in 2022. The breakdown of the budget includes N869bn for statutory allocation, N3.8tr for debt servicing, N6.9tr and N5.4tr for recurrent and capital expenditure, respectively.
Due to a not-so-impressive revenue position of the federal government, it has so far released N1.7tr for capital expenditure out of the N2.7tr budgeted for 2022, as of October 2022.
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Within the year under review, Nigeria’s Gross Domestic Product (GDP) grew by 2.25 per cent (year-on-year) in real terms in the third quarter, behind forecast.
Not satisfied with the growth trajectory of the economy, the federal government announced an ambitious target.
The federal government said it was targeting a gross domestic product (GDP) of over $12tr by the year 2050. It also said it is targeting a per capita income of $33,000 per annum.
The Minister of Finance, Budget and National Planning Mrs Zainab Ahmed disclosed this at the launch of the National Plan for Financing Safe Schools.
“With an average real GDP growth rate of 7%, a GDP of about $12tr by 2050, and an end-period per capita income of $33,000 per annum is projected,” she said.
However, whether these lofty targets would be achieved, is yet to be determined.
Another important conversation that happened within the year was the FG’s calling for debt relief or cancellations and, in another breath, claiming Nigeria is not broke and requires no debt relief or cancellations.
Mrs Zainab had declared that Nigeria doesn’t have any need to restructure, because “our debt management strategy is being followed closely.”
But in September 2022 at the United Nations (UN) General Assembly, President Muhammadu Buhari called for debt relief for Nigeria and other developing countries. Revenue problems still continue to plague the government and the minister has emphasized this.
After the country’s oil revenue nose-dived following widespread oil theft, the government stepped up policing of the oil-producing region, which has begun to yield results. Recently the NNPC has reported that it has been curtailed and we are beginning to see the pick-up with the production levels. This means more revenue will come to the government.
The country has also witnessed a significant increase in non-oil revenue. The FG also ramped up support to the states with N5.03 trillion, plus an additional $3.4bn that has been released to States by the Federal Government over the life of this administration.
The FG also launched its new economic growth plan. The delivery of the successor plan to the ERGP, 2017-2020 – the National Development Plan (NDP), 2021-2025, was launched. The Plan was approved by the Federal Executive Council and launched by Mr. President on December 22, 2021.
On MSMEs, according to a report jointly released by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS) in January 2022, MSMEs accounted for 96.7 per cent of businesses and contributed 46.3% to Nigeria’s Gross Domestic Product (GDP). However, they only account for 6.2% of gross exports. The relatively low contribution of MSMEs to exports is worrisome, given their significant contribution to nominal GDP and for this reason, urgent steps are being taken to alleviate the constraints limiting MSMEs’ participation in cross-border trade.
The federal government also launched a plan to finance safer schools across the country. The National Plan will be implemented between 2023-2026, with a total investment size of N144.8bn.
