The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun has said that the federal government has recorded significant strides in its fiscal management, with a dramatic decline in debt service and a surge in non-oil revenue.
He also said the ongoing reforms by the present administration is yielding positive results.
In his quarterly press briefing Thursday in Abuja, titled ‘Economic Recovery and Growth: Progress & Prospects. 2024 half year review, Edun stated that economic activities in agriculture, industry, and service sectors were faster in the last six months – the first time in the last 6 years.
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, he said.
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 noted that the reforms were paying off as the pace of annual growth of inflation is slowing adding that coordinated monetary and fiscal policies was benefiting Nigerians.
He pointed out that the primary areas of focus for the administration is on driving investments in the agriculture, oil and gas and improving power supply to about 6,000MW.
He said, “Several government initiatives and interventions are being implemented to increase the supply of food in particular, as we know the consumer price index effect was 50% food. So when you achieve a reduction in food prices, you achieve a huge reduction in the overall inflation rate.
“CBN has been proactive in adjusting the monetary policy rate to address inflation head on which is in line with his legal mandate. And this is beginning to have the desired effect as we said earlier, monthly inflation is slowing.”