Deficit spending by the Federal Government increased by 2.05 percent year-on-year (YoY), reaching N1.99 trillion in the first four months of 2024 (4M’24), compared to N1.95 trillion during the same period in 2023 (4M’23).
An analysis of the Federal Government’s fiscal activities, based on data from the Central Bank of Nigeria (CBN) Economic reports, revealed that deficit spending rose by 3.6 percent in January, amounting to N1.06 trillion, up from N1.1 trillion in December 2023.
However, in February, the deficit decreased by 25.6 percent to N788.64 billion, only to increase again in March by 4.4 percent to N823.91 billion. The upward trend persisted in April, with deficit spending rising by 0.1 percent to N824.79 billion.
According to the CBN, the increase in the deficit recorded in April was attributed to a 0.55 percent month-on-month decline in retained revenue, which fell to N419.91 billion in April from N422.23 billion in March. This revenue drop was primarily due to lower receipts from exchange gains.
The CBN stated: “The fiscal operations of the Federal Government of Nigeria (FGN) in April resulted in an expansion of the fiscal deficit. Provisional data indicated that primary and overall deficits rose to N260.98 billion and N824.79 billion, respectively, compared to N249.43 billion and N823.91 billion in the previous month. The expanded deficit was a result of a significant decline in retained revenue.”
“FGN retained revenue decreased during the review period, primarily due to lower receipts from exchange gains. Provisional data showed that retained revenue fell to N419.91 billion, representing a decline of 0.55 percent compared to March 2024 and 74.29 percent below the monthly benchmark.”
“Additionally, the provisional data indicated that the aggregate expenditure of the FGN decreased, largely due to reduced capital spending. At N1,244.71 billion, expenditure was 0.12 percent lower than the previous month and 48.10 percent short of the projected spending of N2,398.12 billion. This decline was mainly attributed to a reduction in capital outlays during the review period.”
“Further analysis revealed that recurrent expenditures accounted for 84.5 percent, capital expenditures for 6.3 percent, and transfer payments constituted 9.2 percent of the total.”
