Nigeria’s expenditure in the first six months of 2022 exceeded its revenue by N6.23tn, the latest figures obtained from the Central Bank of Nigeria (CBN) has revealed.
According to the second quarter economic report on fiscal sector development compiled from the OAGF and CBN staff estimates, the Federal Government recorded N3.2tn and N2.74tn fiscal deficit in the first and second quarters of 2022.
The reduction of FGN expenditure, compared with the decline in FGN retained revenue, induced a contraction in fiscal deficits in the second quarter of 2022 from the first quarter report.
It however exceeded the Federal Government’s fiscal deficit budget of N1.6tn for the period under review.
The report stated that “At N2.74tn, the provisional fiscal deficit of the FGN was 21.5 per cent below the level in the preceding quarter. However, fiscal deficits expanded by 71.7 per cent, when compared with the quarterly budget of N1.6tn.”
Driven by a reduction in capital spending, the provisional aggregate expenditure of the FGN fell by 17.1 per cent and 11.4 per cent, relative to the level in the first quarter of 2022 and the quarterly target, respectively.
The provisional aggregate expenditure of the FGN amounted to N3.79tn in the review period.
A breakdown revealed that recurrent expenditure, capital expenditure, and transfers accounted for 81.0 per cent, 13.3 per cent and 5.7 per cent of total expenditure, respectively.
It noted that the fiscal operations of the Federal Government in the second quarter of 2022 remained aligned with the extant fiscal frameworks, which sought to achieve macroeconomic stability, improve revenue generation, and create fiscal space to boost infrastructural development, among other objectives.
Fiscal conditions in the second quarter of 2022 improved, relative to the preceding quarter, following enhanced oil and non-oil receipts. However, revenue targets fell short of the benchmarks.
The increased earnings moderated the shortfall in FGN retained revenue from the target by 2.7 per cent, compared to a 17.1 per cent decline in FG’s expenditure. Consequently, the provisional fiscal deficit contracted by 21.5 per cent, relative to the preceding quarter.
Gross federation receipts in the second quarter of 2022, at N3.2tn, exceeded the level in the first quarter of 2022, by 40.8 per cent, but fell below the benchmark of N4.6tn by 30.3 per cent. The higher revenue outcome was attributed to the sustained rise in crude oil prices and the seasonality effect on the corporate income tax receipt. However, the revenue performance remained subdued by rising petroleum (PMS) subsidy payments.
