The Central Bank of Nigeria, CBN, disclosed this in its August Economic report, which showed that the FG recorded declines in both revenue and expenditure during the month.
The report shows that revenue rose 15 per cent, YoY to N2.83 trillion from N2.46 trillion in the corresponding period of 2021 (8mths-2020). But expenditure rose slightly faster by 16 per cent, YoY, to N7.11 trillion from N6.23 trillion in the corresponding period of 2020 (8mths-2020).
This resulted in a N5.5 trillion deficit during the period representing a 39 per cent, YoY, increase when compared with N3.97 trillion recorded in the corresponding period of 2020.
However, the CBN August Economic report showed that FG’s monthly deficit spending fell by 25.2 per cent, month-on-month, MoM, to N405.28 billion from N541.85 billion in July.
Explaining the figures, CBN stated: “The significant drop in aggregate expenditure, due to a fall in overhead cost and capital expenditure, outweighed the impact of low revenue outcome on the fiscal balance in August.
“Consequently, the provisional overall fiscal balance of the FGN, at N405.28 billion, contracted by 25.2 per cent, compared with N541.85 billion in July.
“Although the lower deficit increases the latitude for the maneuvering of fiscal policy, it projects, in part, losses in economic activities.
“FGN’s retained revenue in August 2021 fell by 10.4 per cent to N376.33 billion, relative to N420.2 billion in July 2021 due to a 52.2 per cent dip in the FGN independent revenue, The Federal Government recorded reductions in receipt in all its revenue components.
“The overriding decline in its independent revenue sources indicates lower remittances from ministries, departments, and agencies (MDAs) and government business interests. However, FGN statutory receipt from the Federation Account rose by 6.2 per cent to N299.00 billion, following the improvement in federation allocation.
“Provisional aggregate expenditure of the FGN, at N781.61 billion, fell by 18.8 per cent due to a reduction in overhead cost and disproportionately low capital expenditure. Although recurrent expenditure shrunk by 18.3 per cent swayed by a 48.9 per cent decline in overhead cost, it maintained its dominance in total spending, at N683.46 billion. Recurrent expenditure accounted for 87.4 per cent of total spending in August, while capital expenditure and transfers constituted 7.3 per cent and 5.3 per cent, respectively. The low allocation to capital expenditure was attributed to the lag in capital releases in the period.”
