The Federal Government has recorded a N4.45 trillion deficit spending in ten months.
The deficit which climbed by 17 per cent, year-on-year (y/y), against N3.8 trillion recorded in the corresponding period of 2019.
The sharp increase in deficit was driven by the decline in revenue which worsened in October, falling by 6.5 per cent, month-on-month (m/m) to N275 billion from N294 billion in September.
The Central Bank of Nigeria (CBN) disclosed this in its monthly economic report for October 2020. Breakdown of the CBN economic reports from January to October last year showed 28 per cent, y/y, decline in FG’s retained revenue during the ten months period, to N2.88 trillion from N3.99 trillion recorded in the same period in 2019. In the same vein, the FG recorded 6.0 per cent y/y decline in expenditure to N7.33 trillion during the ten months period to October 2020, from N7.78 trillion in the same period of 2019. Narrating how the fiscal position of the FG worsened in October last year, especially the deteriorating trend in revenue, the CBN, in the report said: “The persisting effects of the COVID-19 pandemic on the fiscal profile and operations of the Federal Government led to a huge deficit in October 2020. The estimated deficit amounted to N451.22 billion compared to the budget benchmark of N414.63 billion, the N418.50 billion in September 2020 and the N323.84 billion in October 2019.
“The estimated fiscal deficit rose by 8.8 per cent and 7.8 per cent above the 2020 budget benchmark and the level in September 2020, respectively. The development was attributed to the 6.6 per cent decline in retained revenue,and the 1.9 per cent increase in aggregate expenditure relative to the level in the preceding month “The revenue profile of the FGN revealed a lingering challenge due to declines in statutory receipts and persistent shortfalls in FGN Independent revenue. The total retained revenue of N274.48 billion recorded in October 2020, was significantly below the budget benchmark and the level recorded in October 2019 by 43.6 percent and 52.8 per cent, respectively. “Releases to MDAs in respect of personnel cost and capital expenditure, were the major drivers of government expenditure in October 2020.
At N725.70 billion, provisionally estimated aggregate expenditure of the Federal Government, rose by 1.9 per cent above the N712.30 billion in September 2020, but declined by 19.8 per cent below the N904.77 billion in the corresponding period of 2019.
“Overall, total expenditure fell below the budget benchmark of N900.88 billion by 19.4 per cent, indicative of government’s revenue constraint.”