Nigeria’s Fiscal Deficit Widens To N931bn In 59-days
In the first two months of this year, Nigeria recorded -N931 billion in fiscal deficit, highlighting the severe pressures on the government.
The Central Bank of Nigeria’s (CBN’s) latest monthly economic report shows that the federal government’s operations resulted in a fiscal deficit of -N513 billion in Feb ’23, about 19 percent higher than a deficit of -N418 billion recorded in Jan ’23, but fairly lower than the -N654 billion deficit recorded in the corresponding period of Feb ‘22.
Thus, in the first two months, the federal government recorded -N418 billion in Jan ’23, and -N513 billion deficit in Feb ’23. These add up to a total of -N931 billion in budget deficits.
Analysts at FBNQuest in an emailed note on Monday, attributed the widening deficits to an -8 percent reduction in FGN’s retained revenue which fell to N479 billion, far below the budgeted benchmark of N831 billion.
Nigeria has had issues with revenue generation as the production of crude oil, the country’s major revenue earner, has significantly fallen below target due to persistent crude oil theft.
The government has relied heavily on borrowing to finance its annual budget with the result that the government’s revenue to debt servicing ratio stood at 111 percent as of March 31, 2023.
In other words, the immediate past government of Muhammadu Buhari spent all its revenue on debt service.
In the First Quarter (Q1) of this year, for instance, the government generated N5 trillion I revenue but spent N5.6 trillion on debt servicing.
As at March 31, 2023, the Government’s public debt stock comprising FGN, the 36 states and Abuja, stood at N49.85 trillion (equivalent to $108.30bn), said the country’s debt management office (DMO).
But this amount of debt stock does not include the CBN’s ways & means loans of N22.719 trillion.
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