According to the Central Bank of Nigeria’s April 2024 Monthly Economic Report, the Federal Government’s fiscal deficit increased by 0.1% month on month to N824.79 billion in April, up from N823.91 billion in March.
A fiscal imbalance occurs when a government’s revenue falls short of its expenditure. The CBN report, released on Thursday, showed that the deficit was 7.92 percent more than the planned N764.19 billion for the period.
The bank also reported that consumer credit outstanding fell by 53.83 percent to N3.8 trillion at the end of April 2024, compared to the previous month.
According to the CBN, the increase in deficit was caused by a 0.55 percent MoM decrease 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.
The report read, “The fiscal operations of the Federal Government of Nigeria, in April resulted in an expansion in the fiscal deficit.
“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 expanded deficit reflected the sharper decline in retained revenue.
“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 per cent, respectively.”
Similarly, the apex bank noted that government expenditure for April declined MoM by 0.16 per cent to N1.246tn from N1.244tn in March due to reduced capital spending.
“The provisional data showed that aggregate expenditure of the FGN declined due to reduced 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.”
Meanwhile, customer credit outstanding reduced significantly by 53.83 per cent to N3.8tn due to low loan appetite by customers fuelled by the high interest rate.
The decline was on account of the 60.79 per cent fall in personal loans to N2.95tn. However, retail loans increased by 18.81 per cent to N856.77bn.
“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.
