The Minister of Finance, Wale Edun, has said Nigeria’s revenue to debt service ratio has declined from 97% in 2023 to 68% in 2024, indicating a reduction in the debt burden of the government.
Edun made this statement during a press briefing with journalists on Thursday in Abuja.
The Minister said the country’s revenue is now being managed in such a way that promotes transparency, accountability and visibility of government spending.
According to Edun, the country’s revenue condition has been revamped as it no longer depends on ways and means advances from the Central Bank to fund its fiscal obligations.
“There has been a reconfiguration of the processes and the procedures to give greater visibility, transparency and accountability in government spending. That’s the way the government can earn the trust of the people that their money is being spent wisely.
“This government has exited ways and means borrowing.
“Total debt service has declined from 97% of revenue in the first half of 2023 to 68% in 2024,” Edun said.
FG targets a 20% Inflation Rate
In addition, Edun said the federal government is targeting between 25 to 20% inflation rate before the end of the year.
He said this figure Is also being signalled by the Central Bank of Nigeria.
He added that the government is creating incentives in the agricultural sector as well as the oil and gas industry to drive economic growth and productivity.
Accordingly, Edun stated that the government expect the debt stock of Nigeria to decline to about $95 billion in dollar terms.
“There is a focus on inflation, production and supporting businesses as a whole. As part of the implementation plans of the short term stabilization package, particular focus will be given to driving food inflation and creating an improved investment climate for oil and gas.
“By the time we can have a successful harvest and can reduce post-harvest losses, we expect inflation to come down between 20 and 25%. This has already been signalled by the Central Bank.
“We expect the total debt stock to be below in dollar terms, $95 billion. And we expect budget deficits to be around 4% which is the target,” Edun added.
What you should know
The federal government, under Buhari’s administration, borrowed from the Central Bank a whooping sum of N27 trillion in ways and means advances.
This surge of debt from the CBN led to an increase in cost-push inflation as well as an excess of money supply in the economy.
According to the new CBN chief, Yemi Cardoso, the current inflationary pressure on the economy is strongly driven by the consequences of this excess supply of money in the system.
Nigeria’s inflation rate peaked at a 28-year high in June at 34.19%, according to the National Bureau of Statistics (NBS).
As a result, the Cardoso-led monetary policy committee continues to raise the interest rate, currently at 26.75%, to rein in inflation in the country.
Leave a Comment