Synopsis

• A major headwind to the government's ability to finance public expenditure and drive prosperity for the people is its fiscal weakness, which has been aggravated by recent events, thereby worsening economic sustainability.
• At about 7%, Nigeria has one of the lowest revenue-to-GDP ratios globally, and one of the lowest public expenditure to GDP ratio at about 11%. Actual government revenue has consistently underperformed in recent years while expenditure often matches or surpasses projections.
• Over the past decade, Federal Government's expenditure increased by 158% (from N4.7 trillion in 2011) to N12.2 trillion in 2021, compared with a 42% increase in revenue over the same period (from N3.5 trillion to N5.1 trillion). 
• Consequently, Nigeria's public debt has increased by more than 4 folds (424%) from N7.6 trillion in 2012 to N39.6 trillion in 2021. As at Q2-2022, Nigeria's debt stock has expanded to N42.9 trillion excluding an estimated N22 trillion in CBN overdraft, which has increased by over 16,270% from N134.8 billion in 2012. 
• The sustained fiscal deficits leading to rising debt and increasing ratio of debt service cost to revenue is approaching a crisis level which will have severe macroeconomic implications. Hence, the need for urgent intervention.

Overview and Economic Context

Highlights of Nigeria’s 2023 Budgets

Issues and Matters Arising

Recommendations and Final Thoughts

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