CBN: FG records N930bn in two-month fiscal deficits

According to the Central Bank of Nigeria, the Federal Government racked up a fiscal deficit of N930.8 billion between the months of January and February 2023.

According to the Central Bank of Nigeria’s (CBN) monthly economic report for the month of February 2023, “The estimated overall fiscal deficit of the FGN expanded in February due to a drop in the retained revenue.”

“The provisional fiscal deficit of the FGN increased by 22.8 percent to a total of N513.05 billion when compared to the deficit for the previous month. Nevertheless, it was 16.2 percentage points lower than the budget benchmark.

According to the findings of the study, the budget shortfall in January amounted to N417.75 billion.

According to the report, the decline in oil revenue of 60.2% during the month of February contributed to a 32.3 percentage point drop in accretion into the federation account when compared to the previous month.

It went on to say that as a consequence of this event, the overall fiscal deficit (provisional) grew by 22.8 percent as a result of a 16.4 percent increase in provisional FGN capital expenditure and a 7.7 percent decrease in FGN retained revenue.

At the end of December 2022, the country’s total public debt was calculated to be N46.25 trillion, which represented 23.2% of GDP. This figure remained below the 40% national threshold.

It was stated there that “federation receipts were below the level in January by 32.3 per cent when they stood at N1.04tn.” In a similar manner, it was 34.3 percent lower than the budget2 of 1.58 trillion.

The decrease, when compared to the previous month of January, was attributed to a drop in collections from the petroleum profit tax and royalties. The revenue from oil came in at N308.07 billion, which is 60.2% less than what was brought in during the previous month.

“The outcome was largely determined by the 60.5% decrease in collections from petroleum profit tax and royalties,” the author writes. “[T]he decrease in collections was the primary factor.”

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Non-oil revenue came in at N730.21 billion, which was 3.7 percent and 7.4 percent lower than the level it had reached in the previous month and the monthly target, respectively.

Because of the seasonality of the payments associated with the corporate tax, there was a decrease in collections of 10.5%, which was largely responsible for the decrease.