The Federal Government of Nigeria has recorded a N2.23tn fiscal deficit in the fourth quarter of 2021. This was revealed by figures obtained from the Central Bank of Nigeria’s (CBN) economic report for the fourth quarter of 2021.
The report stated, “Federation receipts in the fourth quarter of 2021 declined, following shortfalls in oil revenue. At N2.84tn, provisional federation receipts fell below the quarterly benchmark and the level in the preceding quarter by 7.5 percent and 0.7 percent, respectively.
“Non-oil revenue maintained its dominance, accounting for 60.8 percent of the total collections, while oil revenue constituted the balance of 39.2 percent. Provisional Federal Government of Nigeria retained revenue, at N1.27tn, which declined by 36.6 percent and 3.2 percent, relative to the budget benchmark and the preceding quarter, respectively, reflecting the persistent revenue challenge over the past two years.
“Following a decline in aggregate expenditure in the fourth quarter of 2021, the fiscal deficit of the FGN contracted by 12.0 per cent to N2.23tn, relative to the preceding quarter.”
The report explained that fiscal operations of the Federal Government- retained revenue declined due to shortfalls in the receipt from federation account sources.
At N1.27tn, provisional retained revenue of the FGN declined by 36.6 percent and 3.2 percent, relative to the budget benchmark and the preceding quarter, respectively, reflecting the subsisting revenue challenge over the past two years.
It explained that the decline in provisional capital expenditure triggered an 8.8 percent drop in aggregate spending in the fourth quarter of 2021, relative to the preceding quarter.
A disaggregated analysis revealed that recurrent expenditure rose by 5.6 percent, relative to the preceding quarter, while capital expenditure dropped by 61.3 percent over the same period.
Recurrent spending maintained its dominance, accounting for 75.1 percent, while capital expenditure and transfers constituted the balance of 21.3 percent and 3.6 percent, respectively.
Aggregate expenditure fell faster than revenue, thus tapering the provisional deficit. At N2.23tn, the provisional fiscal deficit of the FGN was 12.0 per cent lower than the level in the preceding quarter, the report noted.