The federal government is responsible for collecting taxes on income, profits, and property, as well as import and export taxes and excise duties. It also runs the national transportation system. The petroleum sector provides over 83% of budgetary revenues. A large share of these revenues is redistributed to state governments. The budget is consistently in deficit. In 1998, debt financing amounted to $4.4 billion, but the 1999 budget provided for only $1.7 billion.
Public investment flourished during the oil boom years of the 1970s. When the oil market prices collapsed in the 1980s however, the Nigerian government maintained its high level of spending, thus acquiring substantial foreign debt. Although privatization efforts began in 1986, increased government spending outside the official budget since 1990 has damaged public finance reform. As a result, the federal deficit increased from 2.8% of GDP in 1990 to 9% in 1998. Privatization has picked up considerably in recent years, however; the government sold all state-owned banks, fuel distribution companies, and cement plants in 2000. Nigeria is still looking to unload the troubled Nigerian Airways and the state telephone company NITEL.
Nigeria's official foreign debt is about $32 billion, about three-fourths of which is owed to Paris Club countries. Nigeria reached a one year debt rescheduling agreement in August 2000, but after a year had passed the country was still unable to meet some of the requirements. The IMF agreed to give Nigeria a few more months to meet the conditions, but as of September 2001, it did not appear that even that deadline would be met.
The US Central Intelligence Agency (CIA) estimates that in 2000 Nigeria's central government took in revenues of approximately $3.4 billion and had expenditures of $3.6 billion. Overall, the government registered a deficit of approximately $200 million.