2018 Budget Under Pressure Owing To FG’s Revenue Shortfall
There are indications that 2018 budget funding is still under pressure. This is due to the fact that the Federal Government has recorded huge shortfall in revenue collection against budget estimates.
The finding was contained in a data obtained from the Central Bank of Nigeria’s (CBN) Economic Report for August 2018 released yesterday.
The report stated: “At N745.52 billion, estimated federally-collected revenue (gross) in August 2018 fell below both the 2018 monthly budget estimate of N1.1 trillion and the receipt in the preceding month of N947.62 billion by 32.7 and 21.3 per cent, respectively. The decline in the monthly budget estimate was attributed to a shortfall in both oil and non-oil revenue.
“Oil receipts at N403.59 billion or 54.1 per cent of total revenue, was below the monthly budget estimate of N640.21 billion by 37.0 per cent, as well as below the preceding month’s receipt of N513.54 billion by 21.4 per cent. The fall in oil revenue relative to the monthly budget estimate was attributed to the drop in crude oil production arising from repairs and maintenance of oil facilities at various NNPC terminals.
“At N341.93 billion or 45.9 per cent of total revenue, non-oil revenue was below both the 2018 monthly budget estimate of N466.91 billion and the N434.08 billion received in July 2018 by 26.8 and 21.2 per cent, respectively. The lower revenue relative to the monthly budget estimate was due to shortfalls recorded in most of the components.”
The report also shows that currency in circulation dropped for the fourth consecutive month by 4 percent month-on-month (MoM), or N10 billion, to N1.8 trillion in July 2018, from N1.9 trillion in June, just as banks’ credit to the domestic economy declined marginally by 0.4 percent during the same period.
The CBN data shows that currency in circulation rose to as high as N2.16 trillion in December 2017 but fell to N1.94 trillion in January and N1.95 trillion in February 2018.
The report stated: “Currency-in-circulation, at N1.825 billion, on month-on-month basis, fell by 4.0 per cent in July, 2018, compared with the decline of 1.6 per cent at the end of the preceding month, which reflected the decline of 3.4 per cent in its currency outside banks component.
“Banks’ credit to the domestic economy fell marginally by 0.4 per cent to N19.043 trillion at end-July, 2018, in contrast with the level at end-June, 2018. This was attributed to the decline in claims on both the Federal Government and the private sector in the review month.’’