CBN: Nigeria’s Fiscal Deficit Rises To 2.23trn In Q4 2021
The Central Bank of Nigeria (CBN) reports that the Federal Government recorded a fiscal deficit of N2.23 trillion in the fourth quarter of 2021.
The apex bank revealed this in its economic report for the fourth quarter of 2021.
A fiscal deficit occurs when a government’s income falls short of its spending. In other words, a high fiscal deficit indicates that the government is spending beyond its means.
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According to the report, the 12 percent contraction in fiscal deficit, followed a decline in aggregate expenditure in the fourth quarter of 2021.
“Following a decline in aggregate expenditure in the fourth quarter of 2021, the fiscal deficit of the FGN contracted by 12.0 percent to N2,232.33 trillion, relative to the preceding quarter”, the report states.
“Non-oil revenue maintained its dominance, accounting for 60.8 percent of the total collections, while oil revenue constituted the balance of 39.2 percent.
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“Provisional federal government of Nigeria (FGN) retained revenue at N1,265.34 trillion, declined by 36.6 percent and 3.2 percent, relative to the budget benchmark and the preceding quarter, respectively, reflecting the persistent revenue challenge over the past two years”, the report stated.
“Adding that the federation receipts in the fourth quarter fell below benchmark due to the shortfalls in oil revenue.
“The shortfalls were largely the result of poor performances in some oil revenue components.
“Non-oil maintained its dominance of gross federation receipts in the period, accounting for 60.8 percent of the total collections, while oil revenue constituted the balance of 39.2 percent.
“This is a deviation from the 51:49 non-oil versus oil revenue mix, projected in the 2021 budget.
It added that “Federation receipts in the fourth quarter of 2021 declined, following shortfalls in oil revenue. At N2,844.73 trillion, provisional federation receipts fell below the quarterly benchmark and the level in the preceding quarter by 7.5 percent and 0.7 percent respectively”.
The Report further state that growth prospects for the Nigerian economy remain positive, but fragile in the near term, on the back of a rebound in manufacturing activities, improvements in vaccination rates and the supportive impact of CBN interventions on growth-enhancing sectors.
However, CBN, says the lingering security challenges and the delayed implementation of the Petroleum Industry Act (PIA), are the significant downside risks to the outlook.
