N5.5trn Fiscal Deficit Report Wrong – CBN

The Central Bank of Nigeria, CBN, has faulted report that the cumulative fiscal deficit of the Federal Government stood at N5.5 trillion as at August 2021.

The report representing a 39 per cent increase from the level in 2020, based on a year-on-year analysis is not correct, the apex bank said.

Providing clarity, the CBN explained that “The stated figures do not originate from the CBN report quoted. CBN staff estimate from provisional data reveals that the purported fiscal deficit expansion is exaggerated.

“Provisional figures from the August 2021 CBN Monthly Economic Report, pending updates from the fiscal authority, estimated the FGN fiscal deficit for August 2021, at N405.28 billion, which represents 6.3 per cent of the projected deficit in the 2021 FGN budget (including the supplementary budget).

“It is important to note the futility of comparing fiscal deficits year-on-year (on a prorated basis) across two separate fiscal years, for all economic intent.

“Notably, monthly fiscal analysis of government fiscal operations are usually incomplete, given that revenue and expenditure are subject to seasonality and structural encumbrances and only the annual position provides a true picture of fiscal performance. Consequently, a partial analysis, as provided by the publication, cannot tell the total story of the fiscal position of the government position.”