The Federal Government may just be on its way to reducing the 2023 projected budget deficit of 11.34 trillion, with first quarter expenditure exceeding revenue by N1.43 trillion.
Figures were obtained from the Central Bank of Nigeria’s economic report for the third quarter of 2023
The 2023 budget has a projected deficit of N11.34 trillion, or 5.03 percent of GDP, meaning that on average, in a quarter, the deficit should amount to N4 trillion. But the government has fallen short only by N1.43 trillion.
The N1.4 trillion deficit was obtained before the appointment of Ministers; ministers mean more activities and, therefore, more expenditure. Since ministers were appointed in August, the cost-cutting scenario could be replicated in the second quarter.
Meanwhile, the CBN report stated, “The fiscal operations of the FGN in 2023, Q1, resulted in a deficit. At N1.43 trillion, the provisional fiscal deficit of the FGN was 9.6 percent higher than the level in the preceding quarter but 22.1 percent below the target.”
According to the report, the fiscal performance in 2023’s Q1 was impaired by low oil revenue realization. Consequently, the retained revenue of the FGN fell by 10.7 percent relative to 2022, Q4, and was 46.1 percent below the quarterly target.
FGN’s aggregate expenditure also declined by 1.3 and 36.0 percent, respectively, relative to the preceding quarter and the quarterly target.
It said, “Thus, the FGN overall deficit widened relative to 2022, Q4, but narrowed by 22.1 percent when compared with the proportionate budget. Consolidated public debt, as of December 31, 2022, stood at N46.25 trillion (or 22.8 percent of GDP).
At N3.48 trillion, the CBN report said, gross federation revenue fell below the levels in 2022, Q4, and the budget benchmark by 0.4 and 26.6 percent, respectively.
Non-oil revenue continued to dominate government revenue, accounting for 61.4 percent, while oil receipts accounted for 38.6 percent.
Oil revenue, at N1.34 trillion, declined by 3.0 and 43.5 percent, respectively, relative to 2022, Q4 and the quarterly target. The performance was indicative of revenue shortfalls from petroleum profit tax and royalties following lower domestic crude production.
“Conversely, non-oil receipts, at N2.14n, improved against the preceding quarter by 1.2 percent but were 9.6 percent below the quarterly target of N2.37tn,” the report said.