Business

Debt Servicing Gulps N13.17tn Under Buhari, Education Suffers

Published

3 years ago

August 19, 2022

The Federal Government spent nothing less than N13.17tn between 2016 and March 2022 under the regime of President Muhammadu Buhari an analysis by The PUNCH has revealed.

Findings by The PUNCH also showed that during the same period, the government budgeted N4.4tn for education amidst constant criticism by stakeholders, including the Academic Staff Union of Universities, about the low funding of the sector.

According to the information from the Debt Management Office, from 2016 to March 2022, servicing local debts gulped N10.77tn, while the government spent N2.40tn ($7.84bn) to service external debts.

The amount spent on external debt servicing was converted to Naira at the CBN’s exchange rate for the year. For instance, the naira-dollar average exchange rate for 2016 was N197 and N305 in 2017 respectively. It was N305 in 2018 and N360 in 2019. It closed at N380 and N420 in 2020 and 2021 respectively.

From January to December, a total of N1.23tn was spent to service the country’s domestic debts in 2016, during the same year N369.60bn was budgeted for education.

The figure for domestic debt servicing rose to N1.48tn in 2017 while the budget for education in the same year was N550bn.

In 2018, the country’s domestic debt servicing bill rose to N1.8tn with education at N605.8bn.

The cost of domestic debt servicing came down a bit in 2019 to N1.69tn with N620.50bn budgeted for education.

In 2020, debt servicing rose again to N1.85tn with education gulping N671.7bn. By 2021, domestic debt servicing rose to N2.05tn with education gulping N742.52bn.

On the other hand, external debt servicing gulped $353.09m in 2016. It went up to $464.05m in 2017 and jumped up to $1.47bn in 2018.

In 2019, the country spent $1.33bn on external debt servicing. In 2020, external debt servicing gulped $1.56bn. By 2021, it became $2.11bn.

Between January and March 2022, Nigeria spent N668.69bn on domestic debt servicing, while it spent $548.79m on external debt servicing while education gulped N923.79bn.

The United Nations Educational, Scientific and Cultural Organisation has recommended a benchmark of four to six percent of Gross Domestic Product or 15 to 20 percent of a country’s budget for education.

However, in the seven years of the Buhari regime, the highest allocation was in 2017 when a total percentage of 7.38 was allocated to education.

Experts lament

Commenting on the amount the government spent on debt servicing and low funding of education, experts, in separate interviews with The PUNCH, lamented that educational infrastructure was collapsing because of a shortage of funds.

They noted that the government failed to realise that education is the bedrock of national development.

A professor at the Adekunle Ajasin University, Akungba, Victor Olumekun, in an interview with The PUNCH, lamented the government had not focused on the education sector.

Also, the General Secretary of COEASU, Dr Ahmed Lawal, said the government spent money on projects whose contract sums were inflated.

While commenting on the development, the ASUU Chairman at the Federal University of Technology, Minna, Dr Gbolahan Bolarin, said the government did not care about education.

But a foremost economist, Bismarck Rewane, stated, “The debt service is necessary to finance the expenditure that was incurred. There is a crisis in the education sector, no question about it and the strike is only a symptom of the fundamental defect in the education system. I’m saying that the amount spent on education should be increased but because the revenues are down, we can only increase it by borrowing more so we cannot, on the one hand, criticise the government for borrowing more and at the same time criticise the government for spending less.”

On his part, the Director, Research and Strategist, Chapel Hill Denham, Tajudeen Ibrahim, stated that the future of education funding in Nigeria was bleak.

He stated, “I think the future of education funding in Nigeria is weak because it doesn’t seem like the government has a concrete plan for the education sector. In as much as that sector is not seeing inflows from investments, what would happen is either the government borrows to finance that sector or they neglect that sector, just like they are currently doing. Education doesn’t bring much income as a sector, it is a sector that the government has to invest in for long-term benefits.”

An economic expert and seasoned academic at Pan Atlantic University, Dr Olusegun Vincent, explained that the moment there was a debt obligation, it becomes a first line charge in revenue, irrespective of other priorities whether education, agriculture, or defence.

Varsity lecturers, others

The spending on debt servicing and the education sector came to the fore on Thursday as findings by our correspondents showed that lecturers in universities, polytechnics and colleges of education had embarked on no fewer than 837 days of strike since the inception of the regime of the President, Major General Muhammadu Buhari in May 2015.

ASUU is currently on strike in protest against members’ poor welfare and lack of adequate funds for universities among others.

The members of the Colleges of Education Academic Staff Union recently suspended strike for a period of 60 days which, according to the union, will give the government enough time to meet the demands tabled while the Academic Staff Union of Polytechnics suspended its strike on May 29, 2022.

The analysis by one of our correspondents revealed that in January 2017, ASUP, under the then national president, Usman Dutse, embarked on a seven-day warning strike from January 30, 2017, to February 5, 2017.

Also, ASUU declared an indefinite strike on August 17, 2017, over unresolved and contentious issues with the Federal Government. The strike was called off on September 17, 2017.

A few days after the suspension of the strike by ASUU, lecturers in polytechnics on November 11, 2017 announced another strike which lasted for 15 days. The strike was called off on November 29, 2017.

In 2018, lecturers in Colleges of Education took the lead when COEASU embarked on a strike on October 9, 2018. The strike was called off on December 5, 2018.

ASUU embarked on a three-month nationwide strike on November 4, 2018, due to the Federal Government’s alleged inaction. The strike was suspended on February 7, 2019.

Similarly, ASUP embarked on strike again on December 12, 2018 and also called off its strike on February 13, 2019.

In 2020, ASUU initially embarked on a two-week warning strike.

The warning strike was followed by the longest strike in Nigerian history.

The strike which commenced in March 2020 lasted for a total of 270 days.

The pandemic, according to some stakeholders, added to the extension of the strike which was called off in December.

In 2021, while other academic unions took a break from industrial actions, ASUP embarked on 65-day strike. The strike, which commenced on April 6, 2021, was called off on June 9, 2021.

So far in 2022, ASUU has been on strike for close to 186 days with no end in sight.

While ASUP went on strike for just two weeks, COEASU strike lasted for two months before it called for a suspension.

PUNCH.

Business

Naira Records Highest Depreciation Against US Dollar

Published

1 day ago

January 10, 2026

Editor

The Naira recorded the highest depreciation against the United States dollar at the official foreign exchange on Friday to end the week on a negative note.

Central Bank of Nigeria data showed that the Naira extended its dip on Friday to N1,423.17 against the dollar, down from N1,419.72 traded on Thursday.

This represents a N3.45 depreciation against the dollar on a day-to-day basis, the highest in the week under review and in 2026 so far.

Meanwhile, at the black market, the naira remained at N1,490 per dollar on Friday, the same rate recorded on Thursday.

In the other week, the Naira recorded three gains and two losses against the US dollar and other currencies.

The development comes amid the continued rise in the country’s external reserves, which hit $45.67 billion as of January 8, 2026.

Business

KPMG Flags Five Major ‘Errors’ In Nigerian Tax Laws

Published

2 days ago

January 9, 2026

Editor

Fresh apprehension has surfaced over Nigeria’s newly implemented tax framework after KPMG Nigeria highlighted what it described as “errors, inconsistencies, gaps, and omissions” in the new tax laws that took effect on January 1, 2026. The professional services firm in a recent statement cautioned that failure to address these issues could weaken the overall objectives of the tax reforms.

Nigeria’s tax overhaul is built around four major legislations: the Nigeinpieces of legislation:ria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service (NRS) Establishment Act, and the Joint Revenue Board (JRB) Establishment Act. The laws were signed by President Bola Ahmed Tinubu in June 2025 and formally commenced in 2026. However, the reforms have continued to attract controversy since they were first introduced in October 2024.

Despite the concerns, government officials have consistently described the reforms as essential to improving Nigeria’s low tax-to-GDP ratio and modernisingpieces of legislation:modernizing the country’s tax system in line with evolving economic conditions.

In a detailed review, KPMG outlined several areas of concern.

Capital gains, inflation modernizing inflation and market response

KPMG flagged Sections 39 and 40 of the Nigeria Tax Act, which require capital gains to be calculated as the difference between sale proceeds and the tax-written-down value of assets, without adjusting for inflation. According to the firm, this approach is problematic given Nigeria’s prolonged high-inflation environment.

Data from the National Bureau of Statistics shows that headline inflation has remained in double digits for eight consecutive years, averaging over 18 percent between 2022 and 2025. Over the same period, asset prices have been significantly influenced by currency depreciation and general price increases.

Market data also reflects investor sensitivity to tax policy changes. Although the NGX All-Share Index gained more than 50 percent over the year and market capitalisation inflation,capitalization approached N99.4 trillion, equities experienced sharp sell-offs in late 2025. In November alone, market value reportedly declined by about N6.5 trillion amid uncertainty surrounding the new capital gains tax regime.

KPMG warned that taxing nominal gains in such an environment could result in investors paying tax on inflation-driven increases rather than real economic gains. The firm recommended introducing a cost indexation mechanism to adjust asset values for inflation, noting that this would reduce distortions while still enabling the government to earn revenue from genuine capital appreciation.

Indirect transfers and foreign investment concerns

Attention was also drawn to Section 47 of the Nigeria Tax Act, which subjects gains from indirect transfers by non-residents to Nigerian tax where the transactions affect ownership of Nigerian companies or assets.

This provision comes at a time of subdued foreign investment. Figures from the United Nations Conference on Trade and Development indicate that foreign direct investment inflows into Nigeria remain below pre-2019 levels, reflecting ongoing investor caution.

While similar rules exist in other countries, KPMG noted that they are often supported by detailed guidance and clear thresholds. The firm advised Nigerian tax authorities to issue comprehensive administrative guidelines to clarify scope, thresholds,capitalizationthresholds, and reporting obligations inorder to reduce disputes and limit potential negative effects on foreign investment.

Foreign exchange deductions and business impact

Another issue identified relates to Section 24 of the Act, which restricts businesses from deducting foreign-currencyforeign currency expenses beyond their naira equivalent at the official Central Bank of Nigeria exchange rate.

In reality, limited access to official foreign exchange forces many companies to source FX at higher parallel market rates. Under the current rule, the additional cost becomes non-deductible, effectively increasing taxable profits and overall tax liabilities.

KPMG observed that although the provision aims to discourage FX speculation, it does not adequately reflect supply constraints. The firm recommended allowing deductions based on actual costs incurred, provided transactions are properly documented, to avoid penalisingforeign currencypenalizing businesses for factors outside their control.

VAT-related expense disallowances

Section 21(p) of the Nigeria Tax Act also came under scrutiny for disallowing deductions on expenses where VAT was not charged, even if the costs were entirely business-related.

Given Nigeria’s large informal sector and persistent VAT compliance gaps, analysts argue that the rule unfairly shifts part of the VAT enforcement burden onto compliant taxpayers. KPMG advised that the provision be removed or significantly amended, stressing that expense deductibility should be based on whether costs were wholly and necessarily incurred for business, while VAT compliance should be enforced directly on defaulting suppliers.

Non-resident taxation uncertainties

KPMG further highlighted ambiguities around the compliance obligations of non-resident companies. While the Nigeria Tax Act recognizespenalizingrecognizes withholding tax as the finalthe final tax for certain nonresident payments in the absence of a permanent establishment or significant economic presence, the Nigeria Tax Administration Act does not clearly exempt such entities from registration and filing requirements.

Nigeria’s network of double taxation treaties, including agreements with the UK, South Africa, Canada, and France, generally supports the principle that final withholding tax extinguishes further obligations. Experts warn that inconsistencies between the laws could create uncertainty and discourage foreign participation.

KPMG recommended harmonizing the relevant provisions of the NTA and NTAA, with explicit exemptions for non-resident companies whose tax obligations have been fully settled through withholding tax. The firm noted that such alignment would ease compliance and enhance Nigeria’s appeal for cross-border transactions.

As Nigeria undertakes its most extensive tax reform in decades, KPMG concluded that the success of the overhaul will depend on clarity, consistency, and alignment with international best practices. Without timely amendments, businesses may face higher costs, foreign investors could remain cautious, and capital markets may continue to experience volatility.

Recall that KPMG concerns come after a lawmaker, Abdulsamman Dasuki, raised alarm over alleged alterations to the gazetted tax laws.
(DAILY POST)

Business

Naira Records First Depreciation Against US Dollar In 2026

Published

2 days ago

January 9, 2026

Editor

The Naira recorded its first depreciation against the United States dollar in the official foreign exchange market on Thursday, the first time in 2026 so far.

The Central Bank of Nigeria’s data showed that it weakened on Thursday after days of gains to N 1,419.72 per dollar, down from N 1,418.26 on Wednesday.

This means that for the first time this year, the Naira dipped by N1.46 against the dollar on a day-to-day basis.

Similarly, the Naira also depreciated by N10 at the black market to N1,490 on Thursday, down from the N1,480 recorded the previous day.

This comes despite the continued rise in the country’s foreign reserves to $45.64 billion as of Wednesday, 7th January 2026.

DAILY POST reports that the Naira recorded a seven-day bullish run at the official foreign exchange before Thursday’s decline.