Between January and July this year, the Federal Government recorded a fiscal deficit of N1.15tn in its operations, figures obtained from the Central Bank of Nigeria have revealed. The 2019 budget which was signed by President Muhammadu Buhari had capital expenditure of N2.09tn, recurrent expenditure of N4.05tn, statutory transfers of N502bn, and special intervention of N500bn.
The budget also had debt service of N2.25tn. Out of this figure; N1.7tn was approved for domestic debts, while the sum of N433bn was provided for foreign debts. Similarly, the sum of N110bn was approved for sinking fund to retire maturing debt obligations. To fund the budget, the Federal Government had planned to generate the sum of N7tn as revenue.
This is made up of N3.69tn from oil sources, while N3.31tn is projected to come from non-oil sources. Details of the fiscal operations of the Federal Government as contained in the CBN economic report for July showed that the government had not been able to generate adequate revenue to meet its expenditure.
In January, for example, Federal Government’s retained revenue was put at N302.8bn while its expenditure was N303.2bn.This resulted in a deficit of N400m. For the months of February, March and April, the Federal Government’s retained revenue was put at N266.5bn, N301.8bn and N278.3bn while expenditure was put at N496.1bn, N397.8bn and N636.8bn.
This resulted in fiscal deficits of N229.6bn, N96bn and N358.4bn respectively. For the months of May, June and July, the Federal Government based on the CBN data recorded revenues of N268.8bn, N316.3bn and N381.8bn respectively while expenditure was put at N490.7bn, N452.4bn and N490.9bn. The fiscal deficit during the period was put at N221.9bn, N136.1bn and N109.1bn respectively.
The report read in part, “The estimated Federal Government retained revenue, at N381.78bn, in July 2019, was below the monthly budget estimate of N629.44bn by 39.3 per cent. “A breakdown showed that Federation Account constituted 76.8 per cent of the total retained revenue, while FGN Independent Revenue, Value Added Tax, and exchange gain amounted to 19 per cent, 4.1 per cent and 0.1 per cent, respectively
“The estimated Federal Government expenditure in July 2019, at N490.87bn, was below the monthly budget estimate of N792.31bn by 38 per cent. “However, it exceeded the preceding month’s expenditure of N452.38bn by 8.5 per cent. “A breakdown showed that recurrent and capital expenditure constituted 75.7 per cent and 6.1 per cent of the total expenditure, respectively, while transfers constituted 18.2 per cent of the total expenditure for the period under consideration.
“Of the recurrent expenditure, non-debt obligation was 49.1per cent, while debt service payments accounted for 50.9 per cent of the total. “Consequently, the fiscal operations of the Federal Government resulted in an estimated deficit of N109.09bn, compared with the provisional monthly budget deficit of N162.87bn.”
The Lead Director, Centre for Social Justice, Eze Onyekpere said there might be a central challenge in the realisation of the revenue and funding needed to implement the 2019 budget. This, according to him, is against the background of the revelation by the Minister of Finance, Zainab Ahmed, that only 55 per cent of the 2018 revenue projections was realised. He said the revenue underperformance followed the trajectory in previous years, where the Federal Government consistently failed to realise budgeted revenue.
He said, “We are worried that despite the price of crude oil selling above the benchmark price in the last couple of years, we have hardly met the production target of 2.3 million barrels a day.”