Nigeria: Federal Government Records N1.43 Trillion Deficit as Expenditure Outstrips Revenue, CBN Report Reveals

In the initial quarter of 2023, the Federal Government’s expenditure surpassed its revenue by a significant margin of N1.43 trillion, as reported by the Central Bank of Nigeria (CBN).

The CBN’s economic report for the third quarter of 2023, which was obtained on Friday, disclosed that this deficit marked a 9.6% increase compared to the previous quarter’s figure for the last quarter of 2022.

The report elaborated, “The fiscal operations of the Federal Government of Nigeria (FGN) in the first quarter of 2023 resulted in a deficit. At N1.43 trillion, the provisional fiscal deficit of the FGN was 9.6% higher than the level in the preceding quarter but 22.1% below the target.”

It attributed this fiscal performance for the first quarter of 2023 to the challenges posed by lower oil revenue. Consequently, the retained revenue of the FGN plummeted by 10.7% in comparison to the fourth quarter of 2022 and fell a staggering 46.1% below the quarterly target.

Furthermore, the aggregate expenditure of the FGN also decreased by 1.3% compared to the previous quarter and fell short of the quarterly target by a substantial 36.0%.

The report further stated, “As a result, the overall deficit of the FGN expanded concerning the fourth quarter of 2022 but narrowed by 22.1% concerning the proportionate budget. The consolidated public debt, as of the end of December 2022, stood at N46.25 trillion (or 22.8% of GDP).

According to the CBN’s report, gross federation revenue, totaling N3.48 trillion, fell below the levels recorded in the fourth quarter of 2022 by 0.4% and was a significant 26.6% beneath the budget benchmark.

Non-oil revenue continued to dominate government revenue, contributing 61.4%, while oil receipts constituted the remaining 38.6%.

The report specified that oil revenue, totaling N1.34 trillion, experienced a decline of 3.0% compared to the fourth quarter of 2022 and a substantial drop of 43.5% below the quarterly target. This performance was largely attributed to revenue shortfalls in petroleum profit tax and royalties, primarily stemming from reduced domestic crude production.

On the other hand, non-oil receipts, amounting to N2.14 trillion, exhibited a slight improvement of 1.2% in comparison to the preceding quarter but fell short by 9.6% of the quarterly target, which stood at N2.37 trillion, as indicated in the report.