In the first three months of 2023, the Federal Government of Nigeria’s expenses surpassed its revenue by a N1.43tn, as revealed by data from the Central Bank of Nigeria (CBN). This financial imbalance was 9.6 percent higher than the deficit recorded in the previous quarter of 2022.
The CBN’s economic report for the third quarter of 2023 shed light on these concerning financial figures. It stated, “The fiscal operations of the Federal Government of Nigeria (FGN) in the first quarter of 2023 resulted in a deficit. At N1.43tn, 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.”
The report attributed this fiscal challenge to a decline in oil revenue, which impacted the government’s income. As a result, the retained revenue of the FGN dropped by 10.7 percent compared to the previous quarter of 2022, and it fell short of the quarterly target by 46.1 percent.
Furthermore, the report highlighted that the FGN’s aggregate expenditure also decreased by 1.3 percent compared to the previous quarter and by a substantial 36.0 percent in comparison to the quarterly target.
Despite this widening deficit, the CBN’s report noted that the overall fiscal gap, while larger than the fourth quarter of 2022, was 22.1 percent narrower when compared to the proportionate budget.
Regarding Nigeria’s consolidated public debt, as of the end of December 2022, it stood at N46.25tn, which represented 22.8 percent of the Gross Domestic Product (GDP), according to Punch.
Gross federation revenue, according to the CBN report, amounted to N3.48tn, falling short of the levels in the fourth quarter of 2022 and the budget benchmark by 0.4 percent and 26.6 percent, respectively.
Non-oil revenue continued to be the dominant source of government income, making up 61.4 percent, while oil receipts contributed 38.6 percent.
Oil revenue, at N1.34tn, experienced a 3.0 percent decline compared to the fourth quarter of 2022 and a substantial 43.5 percent drop relative to the quarterly target. This decline was mainly due to revenue shortfalls from petroleum profit tax and royalties, resulting from lower domestic crude oil production.
Conversely, non-oil receipts improved slightly against the preceding quarter by 1.2 percent but fell short of the quarterly target by 9.6 percent, totaling N2.14tn.