The Federal Government has achieved a recurrent to capital expenditure mix of 65 percent to 27 percent in its budget performance in the first quarter of 2013 which is 550 basis points lower than the Finance Ministry’s 32.5 percent capital expenditure target for the overall 2013 budget.
A breakdown of the total expenditure showed that the recurrent component accounted for 65.5 percent, capital component 27.0 percent, while statutory transfers accounted for the balance of 7.5 percent, according to data from the Central Bank of Nigeria (CBN) economic report for the period.
The total estimated Federal Government expenditure for the first quarter stood at N1.19 trillion and was lower than the proportionate budget estimate by 8.0 percent, but higher than the corresponding period of 2012 by 8.3 percent.
“The development (relative to the quarterly budget estimate) was attributed to the delay in capital releases during the review period,” the CBN said.
A further breakdown of the recurrent expenditure showed that the non-debt component accounted for 77.4 percent, while debt service payments accounted for the balance of 22.6 percent.
Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N284.78 billion or 2.9 percent of the estimated nominal GDP for the quarter, compared with the 2013 benchmark and the preceding quarter deficits of N276.11 billion and N207.32 billion, respectively.
The deficit was financed mainly from domestic sources, the CBN said.
The 2013 budget makes provision for an aggregate expenditure of N4.987 trillion, representing an increase of 6.2 percent over the N4.697 trillion appropriated for 2012.
At N908.14 billion, the Federal Government retained revenue for the first quarter of 2013 was lower than the receipts in the corresponding period of 2012 by 10.6 percent.
Of this amount, the Federal Government share from the Federation Account, VAT Pool Account and FGN Independent Revenue were N643.87 billion, N26.34 billion and N35.42 billion, respectively, while “others” accounted for the balance of N202.51 billion.
Meanwhile, The Federal Government will increase the amount it borrows overseas to around 40 percent of all debt over the next three to five years, from 12 percent currently, to lower its funding costs, the head of the debt office said on Monday.
DMO director general, Abraham Nwankwo, said he expected Nigeria’s debt to GDP ratio to fall to 17 percent over the same period from 21 percent, as the country switches into cheaper foreign debt, reports Reuters.