One of the items he highlighted was a claim that the debt service-to-revenue ratio dropped from 100% in 2022 to 40% in 2024 under his administration.
President Bola Tinubu on Thursday listed his administration’s “successes” in his statement to mark two years in office.
One of the items he highlighted was a claim that the debt service-to-revenue ratio dropped from 100% in 2022 to 40% in 2024 under his administration.
For clarity, Nigeria operates under three levels of government: federal, state, and local government.
The federal government typically presents its own budget to a joint session of the National Assembly, while state governments present theirs to their respective state houses of assembly.
When revenues are distributed, the federal, state, and local governments each receive a share.
The revenue of the federal government is commonly referred to as “retained revenue.”
In the budget documents, state governments estimate how much they will spend on debt servicing, while the federal government, led by President Tinubu, also estimates its debt servicing costs.
An admission of this may be why the Tinubu-led administration included the following paragraph in its press statement celebrating two years in office: “Thanks to our reforms, state revenue increased by over N6 trillion in 2024, ensuring that subnational governments can reduce their debt burden, meet salaries and pension obligations on a timely basis, and invest more in critical infrastructure and human capital development.”
“Our debt position is improving. While foreign exchange revaluation pushed our debt-to-GDP ratio to around 53%, our debt service-to-revenue ratio dropped from nearly 100% in 2022 to under 40% by 2024,” Tinubu said.
SaharaReporters subjected the President’s claim—that debt service-to-revenue dropped from 100% in 2022 to 40% in 2024—to data checks using the Central Bank of Nigeria (CBN) economic reports, which are published quarterly and monthly.
Data, however, shows a different picture.
According to the report, the federal government’s retained revenue as of the fourth quarter of 2024 stood at N2.519 trillion, as reported in the economic report published by the apex bank. However, in the same period, debt service stood at N2.199 trillion.
A further review revealed that in the third quarter of 2024, retained revenue stood at N2.282 trillion, while debt service amounted to N2.055 trillion.
The document review also shows that in the second quarter of 2024, retained revenue was N2.408 trillion, while debt servicing cost N3.772 trillion.
In the first quarter of 2024, retained revenue was N1.445 trillion, while debt servicing cost N1.691 trillion, according to the CBN economic report.
In total, the retained revenue by the Tinubu-led Nigerian federal government stood at N8.654 trillion, while debt service costs amounted to N9.717 trillion.
By implication, the debt service-to-revenue ratio stood at 112%, which is significantly higher than the 40% claimed by the Tinubu-led administration in its press statement.
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