The Federal Government recorded a fiscal deficit of N3.05trillion in its operations between January and August this year, figures obtained from the Central Bank of Nigeria have shown.
The 2019 budget signed by President Muhammadu Buhari had capital expenditure of N2.09trillion, recurrent expenditure of N4.05trillion, statutory transfers of N502billion, and special intervention of N500billion.
The budget also had debt service of N2.25trillion. Out of this figure, N1.7trillion was approved for domestic debts, while the sum of N433billion was provided for foreign debts.
Similarly, the sum of N110billion was approved for sinking fund to retire maturing debt obligations.
To fund the budget, the Federal Government had planned to generate the sum of N7trillion as revenue.
This is made up of N3.69trillion from oil sources, while N3.31trillion is projected as revenue from non-oil sources.
Details of the fiscal operations of the Federal Government as contained in the CBN economic report for August this year showed that the government had not been able to generate adequate revenue to meet its expenditure.
For example, the Federal Government’s retained revenue was put at N343.4billion in January while its expenditure was N868.3billion.This resulted in a deficit of N524.9billionn.
For the month of February, March and April, the Federal Government’s retained revenue was put at N318.1billion, N392.2billion and N386.2billion while expenditure was put at N1.09trillion, N532.3bn and N1trillion, respectively. This resulted in fiscal deficits of N780.1billion, N140.1billion and N618.9billion, respectively.
For the months of May, June and July, the Federal Government based on the CBN data recorded revenue of N279.7billion, N310.6billion and N381.8billion while expenditure was put at N499.5billion, N814.5billion and N490.9billion, respectively.
The fiscal deficit during the period was put at N219.8billion, N503.9billion and N109.1billion, respectively.
In the month of August, the government’s revenue was estimated at N308.1billion while the total expenditure incurred during the period was N464.3bn. This resulted in a deficit of N156.2billion during the period.
The report read in part, “At N464.31billion, the estimated total expenditure of the Federal Government was below the monthly budget estimate of N865.31billion by 46.3 per cent.
“It was also below the N490.87billion recorded in the preceding month by 5.4 per cent.
“A breakdown showed that recurrent and capital expenditure constituted 75.5 per cent and 18.6 per cent of the total expenditure, respectively, while transfers constituted 5.9 per cent in the review period.
“Of the recurrent expenditure, non-debt obligation was 69.3 per cent, while debt service payments accounted for 30.7 per cent of the total.
“Consequently, the fiscal operations of the Federal Government resulted in a deficit of N156.18billion, compared with the monthly budget deficit of N159.87billion.”
The Senior Economist, World Bank, Yue Man Lee, said the implications of having low revenue was that the amount Nigeria could spend on human development would be restricted.
Lee, while speaking during the unveiling of a report by the BudgiT on state governments’ sustainability in Abuja said over the years, the fiscal capacity of government at all levels to generate the needed revenue to finance their operations had reduced.
She said, “The broader fiscal challenge that Nigeria faces is low revenue that constrains the budget envelop.
“This, when put in plain terms, is how much revenue that is available to spend on public service and investments in human capital.
“Nigeria is spending, and government spending as a percentage to Gross Domestic Product is way lower than other countries at similar income per capital level. And the reason behind this is because of the exceptionally low revenue that Nigeria collects.”
Lee said with the country having revenue to Gross Domestic Product ratio of about eight per cent, there was a need to come up with measures to boost revenue.
She said the low level of government spending on capital projects contributed to low level of development outcomes.
Also, the Lead Director, Centre for Social Justice, Eze Onyekpere, said there might be a central challenge in the realisation of the revenue and funding needed to implement the 2019 budget.
This, according to him, is against the background of the revelation by the Minister of Finance, Zainab Ahmed, that only 55 per cent of the 2018 revenue projection was realised.
He said the revenue underperformance followed the trajectory in previous years where the Federal Government consistently failed to realise its budgeted revenue.