According to data received from the Central Bank of Nigeria, the Federal Government posted a budget deficit between January 2022 and November 2022 of N7.34 trillion. This information was provided by the CBN in a statement that Mike Obadan, a member of the Monetary Policy Committee, gave at the most recent MPC meeting in January.
Speaking on the fiscal operations of the government, he said, “These have continued to elicit serious concerns considering the growing yearly fiscal deficits and their implications for public debt accumulation (N44.06tn as of September 2022 and excluding nearly N23.0tn Ways and Means Advances) and inflation in view of the Ways and Means Advances financing.
“From January to November 2022, the Federal Government incurred a fiscal deficit of N7.34tn. The projected Federal Government fiscal deficit for 2023 is N11.34tn and it is to be partially financed through deficit financing. This is where the challenge lies for inflation control.”
He claimed that in 2022, the Nigerian economy would face significant challenges, as evidenced by the country’s weakening growth performance, high and rising inflation, pressure on the foreign exchange market and a weakening currency, soaring fiscal deficits and public debt, and an expanding money supply, among other factors.
He said that spillovers from the big economies have continued to have an effect on the country’s macroeconomic performance, including tighter financial conditions, rising inflation, supply chain disruptions, and geopolitical concerns.
According to an MPC member, Robert Asogwa, “The fiscal sector challenges persist and may even worsen in 2023 with rising debt levels and expected deficit position. In 2022, the huge government expenditures in a regime of low revenues kept the overall debt stock at very high levels.
“With the possible addition of existing ways and mean advances to the total debt stock, the overall burden of debt repayment and servicing looks alarming. At a projected fiscal deficit of N11.34tn in the 2023 budget, which is more than the projected overall revenue of N10.49tn, the expectations of any fiscal ease in 2023 may be unlikely.”
