The Central Bank of Nigeria has released data showing that in July and August of 2023, the Federal Government had a budgetary deficit of N1.54 trillion.
The Federal Government reported N818.53 billion and N726.85 billion in budget deficits in July and August, respectively, according to CBN’s monthly economic report for August.
A piece of the report stated, “The FGN’s preliminary budget deficit shrank to N726.85 billion, down 11.0% and 19.1% from the previous month’s level and the appropriate monthly objective, respectively. The decrease in interest payments during the period was reflected in the smaller deficit.
The CBN said that increased oil profits led to a rise in total federation account revenue.
At N1.69tn, it said the federation account receipts exceeded the level in the preceding month by 1.7 per cent, but below the benchmark of N1.76tn by 3.9 per cent.
The improved performance reflected increased collections from production sharing contracts, and the 2023 interim dividend payment by the Nigerian National Petroleum Company Limited; supported by higher receipts from customs & excise duties and FGN independent revenue.
In terms of composition, it stated, non-oil revenue remained dominant, accounting for 81.5 per cent, while oil revenue made up the balance of 18.5 per cent.
At N314.38bn, oil revenue exceeded the level in July 2023 by 27.0 per cent, driven by higher receipts from PSC and dividends from NNPCL. It was, however, below the target of N803.63bn by 60.9 per cent.
Non-oil revenue, at N1.38tn, was 2.7 per cent below the level in July 2023, but exceeded the monthly target by 43.8 per cent, reflecting strong performance in CIT, custom & excise duties, and VAT.
The development reflected improvement in tax administration, increased economic activities and seasonality in tax returns.
According to the CBN, a net balance of N966.11bn was distributed by Federal Account Allocation Committee among the three tiers of government, after statutory deductions and transfers.
Of the net balance, the federal, state and local governments received N374.49bn, N310.68bn and N229.41bn, respectively, while the balance of N51.54bn was allocated to the 13 per cent Derivation Fund for Oil-Producing States.
Net disbursement in August 2023 was 6.5 per cent above the level in July 2023, but was 11.4 per cent short of the monthly target.
