The Nigerian government has recorded significant strides in its fiscal management, with a dramatic decline in debt service and a surge in non-oil revenue.
The minister of finance, Wale Edun, disclosed these positive developments during an assessment of the economy’s first-half performance.
According to the minister, the debt service ratio has plummeted from a staggering 97% in June 2023 to a more manageable 68% in 2024.
This substantial reduction in debt servicing costs frees up significant resources for critical sectors such as infrastructure, education, healthcare, and social services. It also enhances the government’s credibility with investors and international financial institutions.
Furthermore, Nigeria’s overall debt, a combination of domestic and foreign obligations debt have decreased. In addition the dollar debt has also decreased from $181 million to $98 million.
The minister attributed this achievement to prompt payment of contractors and the government’s exit from the Ways and Means financing scheme.
On the revenue front, non-oil income has witnessed unprecedented growth, surpassing the previous year’s performance by a remarkable 30%. This is significantly above the budgeted figure for the first half of 2024.
The minister emphasized the importance of diversifying revenue sources away from oil, highlighting the government’s commitment to tax reforms. The target is to nearly double government revenue as a percentage of GDP from around 14-15% to approximately 25%.
To achieve these gains, the government has implemented robust measures to enhance revenue collection, including the deployment of technology and streamlining processes within revenue-generating agencies. Oil revenue, while still contributing significantly, has declined to 30% of gross revenue compared to 11% in the same period last year. The minister expressed satisfaction with the progress made so far, emphasizing the data-driven approach adopted by the government to steer the economy on the right path.
