One of the highlights of the 2021 budget presented to the National Assembly last week by President Muhammadu Buhari is that the recurrent expenditure in the N13.082 trillion budget is N2.05 trillion higher than capital expenditure.
N 5.65 trillion is allocated for recurrent expenditure in the budget as against N 3.60 trillion for capital expenditure.
President Buhari in his speech, last week,  noted the difficulties in raising revenue, saying, “Let me emphasise that revenue generation remains our major challenge. “ He also asked for scrutiny of cost profiles of government-owned enterprises to improve independent revenue performance. The difference between the recurrent and capital expenditure comes as the Nigerian government seeks to improve the nation’s debt problem and internal revenue generation. An aggregate of N 3,344 trillion has been earmarked for debt servicing in the budget.
N2.75 trillion was allocated for debt servicing in the 2020 budget.
Recently the World Bank warned that the increased percentage of total external debt of the least developed countries of the world created an urgent need for creditors and borrowers alike to collaborate and stave off the growing risk of sovereign-debt crises triggered by the COVID-19 pandemic. The pandemic, which has paralyzed the economy, has also resulted in the continuous depreciation of the naira against the dollar.