FG Records N1.5trn Fiscal Deficit In Two Months, CBN Reveals

The Federal Government recorded N1.54tn fiscal deficit in July and August 2023, figures from the Central Bank of Nigeria (CB) have revealed.

According to CBN’s monthly economic report for August, the Federal Government recorded N818.53bn and N726.85bn fiscal deficits in July and August respectively.

The report read in part, “The provisional fiscal deficit of the FGN, at N726.85bn, contracted by 11.0 per cent and 19.1 per cent, relative to the level in the preceding month and the proportionate target for the month, respectively. The lower deficit reflected decline in interest payments during the period.”

The CBN said there was an uptick in gross federation account revenue following improvement in oil earnings.

At N1.69tn, it said the federation account receipts exceeded the level in the preceding month by 1.7 per cent, but below the benchmark of N1.76tn by 3.9 per cent.

The improved performance reflected increased collections from production sharing contracts, and the 2023 interim dividend payment by the Nigerian National Petroleum Company Limited; supported by higher receipts from customs & excise duties and FGN independent revenue.

In terms of composition, it stated, non-oil revenue remained dominant, accounting for 81.5 per cent, while oil revenue made up the balance of 18.5 per cent.

At N314.38bn, oil revenue exceeded the level in July 2023 by 27.0 per cent, driven by higher receipts from PSC and dividends from NNPCL.

It was, however, below the target of N803.63bn by 60.9 per cent.

Non-oil revenue, at N1.38tn, was 2.7 per cent below the level in July 2023, but exceeded the monthly target by 43.8 per cent, reflecting strong performance in CIT, custom & excise duties, and VAT.

The development reflected improvement in tax administration, increased economic activities and seasonality in tax returns.

According to the CBN, a net balance of N966.11bn was distributed by Federal Account Allocation Committee among the three tiers of government, after statutory deductions and transfers.

Of the net balance, the federal, state and local governments received N374.49bn, N310.68bn and N229.41bn, respectively, while the balance of N51.54bn was allocated to the 13 per cent Derivation Fund for Oil-Producing States.

Net disbursement in August 2023 was 6.5 per cent above the level in July 2023, but was 11.4 per cent short of the monthly target.