According to a report released on Monday by the budget office, the federal government spent 99 percent of the first half of the year's revenues on debt payment.
According to statistics, the federal government had N4.06 trillion in retained revenue as of June 2023, compared to N4.02 trillion in debt payment costs during that same time.
Out of the N5.52 trillion targeted for the first six months of the year, only about N4.067 trillion was generated, indicating a N1.46 trillion shortfall, according to Olumide Ayodele, technical assistant to the director general of the budget office, who spoke on the subject in Abuja.
Ayodele made a speech at the federal ministries, departments, and agencies' budget officers' training ahead of 2024 budget operations.
He contends that the level of services the government can offer its constituents depends on its ability to raise money internally.
The oil industry contributed N604.1 billion of the total N4.067 trillion retained revenue for the time period, while non-oil revenue was N1.14 trillion. Value Added Taxes (VAT) and Company Income Tax (CIT) totaled N195 billion and N592.68 billion, respectively.
The Customs Service brought in N306.18 billion in total revenue, while other receipts were N2.14 trillion.
Ayodele claims that of the actual spending of N7.76 trillion for the first half of the year, N4.02 trillion went toward debt payment and N2.28 trillion went toward payroll expenses, including pensions.
However, he pointed out that as of June 2023, only about N475.98 billion had been made available for capital expenditures.
Although individuals want the government to deliver effective services, not enough money is being raised. People will be eager to pay when we offer effective services, he claimed.
Ayodele continued by highlighting how crucial it is for MDAs to guarantee that monies granted are only used for capital projects, stressing that "because these funds are borrowed, every fund provided for capital spending must be effectively utilized."
"The current Administration's policy is not to take out new loans because the cost of repaying existing debt, which accounts for more than 50% of government revenue, is not very high. The government is attempting to raise revenue while decreasing indebtedness.
Additionally, he urged trainees to concentrate on finishing current projects rather than starting new ones as they get ready for the budget for 2024. He claims that by doing this, the number of projects that are abandoned nationwide will be checked and reduced.
Isah Gwangwazo, the director of expenditure and socials at the budget office, stated in his remarks that the training was intended to improve the participants' overall capacity to use the Government Integrated Financial Management Information System's Budget Preparation Sub-System effectively during the budget preparation process.
Ben Akabueze, the director general of the federation's budget office, was represented by Gwangwazo, who stated that the government's commitment to improving fiscal responsibility and accountability in the management of public monies is underscored by the training session.
"To do this, collaboration and synergy between the various MDAs are essential. We must align our sectors policies and programs with this Administration's particular programs as well as the broad National Development Plan 2021–2025.We must make sure that our actions are coordinated, that our resources are used effectively, and that the results of our combined efforts are felt throughout the country.
It is crucial to remember that President Tinubu's Agenda creates the foundation for a transformative period in our wonderful country. This agenda lays out the strategy for attaining equitable socioeconomic growth, infrastructure development, and the general welfare of our population over the long term. Therefore, it is our obligation to incorporate the principles of this agenda into our individual jobs and responsibilities, he stated.
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