Nigeria’s fiscal deficit balloons to N7.5trn in 2022

Nigeria recorded a fiscal deficit of N7.5 trillion in 2022, according to the latest data from the nation’s budget office.

The deficit, which has expanded every year since 2015, is another sign of the tough task ahead of Nigeria’s new finance minister, Wale Edun.

The government had budgeted a revenue of N9 trillion and a deficit of N5.2 trillion.

However, according to data obtained from the 2022 budget implementation report released by the Budget Office, the Federal Government of Nigeria ended 2022 with a fiscal deficit of N7.5 trillion or 129 percent of the actual revenue collected.

This implies that Nigeria is in a financial crisis as it continually struggles to balance its budget.

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Data from the Budget Office reveals that the federal government received a total revenue of N5.8 trillion, which is a decline from N6.7 trillion received in the same period in 2021.

The country, however, spent N5 trillion on recurrent non-debt expenditures with personal costs gulping N3.49 trillion of the total.

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Debt service cost the government N5.65 trillion during the year which represents 97.4 percent of budgeted revenue compared to N4.2 trillion incurred in 2021 which represented 62.8 percent of budgeted revenue.

The nation’s debt service includes ways and means worth N1.8 trillion while N2.5 trillion and N1.1 trillion were spent on domestic and foreign debt service respectively.

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In terms of capital expenditure, the federal government spent N1.89 trillion which is a decline from N1.9 trillion spent in 2021 and about 50 percent lower than its target of N3.6 trillion.

Data revealed that the N7,523.71 billion deficits recorded in 2022 represent a budget-deficit to GDP ratio of 3.77 percent which is above the target rate of 3.0 percent as stipulated in the FRA 2007.

The deficit was financed in part through N510.21 billion in foreign borrowing and N3,654.12 billion in domestic borrowing during the period.