NIGERIA’S Federal Government made a revenue of N5.99 trillion, spent N19.50 trillion, and recorded a deficit of N13.50 trillion representing 225 percent of the total revenue, according to the recently released 2023 Fiscal Accounts Report of the Accountant General of the Federation (AGF).
Expressing concern over fiscal indiscipline, BudgIT, a civic organisation that applies technology to intersect citizen engagement, said the government spent more than three times what it earned in revenue.
A breakdown of the revenue sources showed that N3.80 trillion came from the Federation Account Allocation Committee (FAAC), FG share of independent revenue raked in N1.98 trillion, the FG share of the Federation Account contributed N2.39trillion, exchange rate differences was N715.75 billion, while Value Added Tax (VAT) added N441.87billion
How was the money spent?
On the expenditure side, Debt servicing accounted for 43.9 percent of the budget at N8.56 trillion—the largest single expense.
Non-debt spending took up 27.8 percent at N5.42 trillion, while capital expenditure was 23 percent at N4.49 trillion.
“It goes without saying that a significant portion of government spending was directed toward debt servicing, surpassing the revenue generated.
“As a result, the government continues to drift away from fiscal responsibility by borrowing more than it earns, resulting in a deficit of N13.50 trillion, “the civic tech organisation stated on its official X handle.
Corroborating the position of BudgIT, analysts at FBN Quest observed that the most recent data from the Central Bank of Nigeria (CBN) shows that the Federal Government of Nigeria’s (FGN) fiscal operations resulted in a fiscal deficit of -N824.8billion in April 2024. The deficit in April is slightly higher than the -N823.9 billion recorded in March 2024 but lower than the reported -N1.1 trillion deficit in the year-earlier period.
According to FBNQuest, the month-on-month (m/m) expansion in fiscal deficit was mainly due to a m/m reduction in retained revenue to N419.9 billion compared with N422.2 billion recorded in March 2024.
Also, April’s retained revenue more than halved (-74 percent) below the budgeted benchmark of about N1.6 trillion.
“The FGN has always been aggressive with its revenue projections. This was highlighted by the consistent pattern of recurring revenue shortfalls compared to the budgeted revenue projections. The consistent underperformance of the oil sector, primarily due to issues around pipeline vandalism and thefts, is a significant factor responsible for the persistent revenue challenges.
“For context, a closer look at the composition of federally collected revenue receipts shows that revenue from oil sources fell by -33 percent m/m to N494.8 billion in April 2024. It was also significantly below the monthly budgeted benchmark of N1.8 trillion, “it stated in an emailed message.
According to the analysts, regarding government expenditure, the FGN’s aggregate expenditure declined slightly to N1.2 trillion from roughly N1.3 trillion recorded in March. It also declined significantly below the budget benchmark of N2.4 trillion.
Recurrent expenditure comprising non-debt and debt service costs increased by +1 percent m/m but declined by -23 percent y/y to about N1.1 trillion.
Notably, the debt service cost fell modestly by -2 percent m/m to N563.8 billion. As a result, the debt service to revenue ratio declined to 134 percent in April 2024, down from 136 percent in the previous month.
similarly, the Capital expenditure decreased by -23 percent m/m to a paltry N78 billion in April, significantly less than the monthly benchmark of N832.9 billion.
Cumulatively, the FGN’s retained revenue and expenditure amounted to about N2.0 trillion and N4.9 trillion over the four months period to April 2024, implying a fiscal deficit of roughly N3.0 trillion.
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