The Federal Government recorded a fiscal deficit of N4.62tn in its operations in the 2019 fiscal period, figures obtained from the Central Bank of Nigeria have revealed. The 2019 budget which was signed by the President, Major General Muhammadu Buhari (retd.), 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 was made up of N3.69tn from oil sources, while N3.31tn was projected as revenue from non-oil sources. Details of the fiscal operations of the Federal Government as contained in the CBN economic report for the fourth quarter of 2019 showed that the government had not been able to generate adequate revenue to meet its expenditure.
The Federal Government’s retained revenue was put at N4.77tn in 2019 while the total expenditure stood at N9.39tn. A breakdown of the revenue showed that the government generated N1.11tn in the first quarter before dropping to N978bn in the second quarter. In the third quarter of last year, the revenue earned by government rose to N1.74tn before it declined to N938.72bn in the fourth quarter.
Further analysis showed that the N9.39tn expenditure was incurred thus N2.51tn in the first quarter, N2.38tn in the second quarter while the third and fourth quarter had N2.41tn and N2.07tn respectively. The inability of the government to raise the much needed revenue to finance its operation resulted in a deficit of N1.4tn in the first quarter while the second, third and fourth quarter deficits were put at N1.41tn, N675.21bn and N1.13tn respectively.
A member of the Monetary Policy Committee of the Central Bank of Nigeria, Obadan Idiah, had described the fiscal deficit of the Federal Government as worrisome. He said this in his personal statement at the Monetary Policy Committee meeting held on November 25 and 26 in Abuja.
He said the deficit being incurred by the government in its fiscal operations had serious implications for debt accumulation and inflation. Idiah said while the current efforts of the government to step up domestic revenue mobilisation through increasing the Value Added Tax from five per cent to 7.5 per cent were in the right direction, it was crucial to restructure recurrent expenditure with a view to achieving some cost savings.