FG’s deficit up N824bn in April as revenue outweighs expenditure

The federal government’s fiscal deficit increased month-on-month by 0.1 percent to N824.79 billion in April from N823.91 billion in March on the decline of government’s revenue, said the Central Bank of Nigeria (CBN).

The apex bank disclosed this in its April 2024 Monthly Economic Report released on its website on Thursday.

A fiscal deficit occurs when the government’s revenue is lower compared with its expenditure.

“The fiscal operations of the Federal Government of Nigeria, in April resulted in an expansion in the fiscal deficit, the report said.

“Provisional data showed that primary and overall deficits rose to N260.98bn and N824.79bn, respectively, from N249.43bn and N823.91bn in the preceding month,” the CBN added.

The report indicated that the deficit was 7.92 per cent higher than the budgeted N764.19 billion for the period.

The expansion in deficit, according to the CBN, was due to a 0.55 per cent MoM decline in retained revenue to N419.91 billion in April from N422.23 billion in March.

It said the decline in revenue was a result of lower receipts from exchange gains.

“FGN retained revenue also dipped in the review period due to lower receipts from exchange gains.

“Provisional data indicated that, at N419.9bn, FGN retained revenue fell relative to the level in March 2024 and the monthly benchmark by 0.55 and 74.29 percent, respectively,” the report stated.

Similarly, the apex bank noted that government expenditure for April declined MoM by 0.16 per cent to N1.246 trillion from N1.244 trillion in March capital spending.

“At N1,244.71 billion, provisional data indicated that expenditure was 0.12 per cent below the level in the preceding month, and 48.10 per cent short of the projected spending of N2,398.12 billion.

“The decline was attributed, largely, to a reduction in capital outlay in the review period. Further analysis showed that recurrent and capital accounted for 84.5 and 6.30 per cent, respectively, while transfer payments constituted 9.2 per cent,” the CBN said.

In the same breath, the CBN also said consumer credit outstanding fell by 53.83 per cent to N3.8 trillion at the end of April 2024 from the level in the preceding month.

The decline in consumer credit was fuelled by the CBN’s tight monetary stance, raising the benchmark interest rate by a total of 800 basis points to 26.75 per cent in just a year to rein in record-high inflation and shore up the weakened naira.

The decrease, according to the Abuja-based bank, was on account of the 60.79 per cent fall in personal loans to N2.95 trillion. However, retail loans increased by 18.81 per cent to N856.77 billion.

“A decomposition indicated that personal loans accounted for 77.48 per cent of the total consumer credit, while retail loans accounted for the balance,” the CBN said.