FG servicing Ways and Means with over N2tr
By Patience Ikpeme
The federal government is currently servicing the Ways and Means debt it owes the CBN with over N2 trillion.
The Technical Adviser to the Director General of the Budget office of the Federation, Professor Olumide Ayodele, stated that servicing the debt borrowed from the CBN is the most expensive debt the government has.
Professor Ayodele explained that the interest rate on the debt is calculated using the Monetary Policy Rate (MPR) plus 2. Currently, the interest rate is 18.75% plus 2, which totals 20.75%.
The government he said pays this interest rate to service the N23 trillion debt. However, whenever the CBN increases the interest rate, the government’s debt servicing also increases.
In response to concerns raised by Ministries, Departments, and Agencies (MDAs) regarding sticking to the budgetary ceiling set for them in the 2023 fiscal year, Professor Ayodele directed the MDAs to work within their allocated budgets.
He acknowledged that some government expenditure, such as fuel and diesel prices, has increased, but he reminded the officials to stay within their capital expenditure ceiling while discussions are ongoing between the minister and the MDAs to align budgetary needs.
Professor Ayodele assured the MDAs that the resources available in 2024 will be more than what was available in 2023.
He directed the MDAs to upload their budgets to their websites and warned that budgets with unclear details will be removed from the 2024 budget.
Regarding revenue generation in 2023, Professor Ayodele stated that as of June 2023, the Federal Government had a retained revenue of N4.06 trillion, which is 73.5% of the target. Oil revenues accounted for N604.10 billion, representing 54.2% of the target, while non-oil tax revenues totaled N1.14 trillion, or 92.7% of the target.
The Director General of the Budget Office of the Federation Mr. Ben Akabueze who was represented by Mallam Aliyu Isa Gwangwazo, Director Expenditure, Socials highlighted the importance of harmonizing sectoral policies and programmes with the national development plan and the specific programmes of the Bola Ahmed Tinubu Administration.
The Director General of the Budget Office urged MDAs to comply with the Budget Call Circular and emphasized that the BOF Helpdesk is available to assist with any inquiries during the budget preparation process.
