FG Records N218bn Budget Deficit In Nov, Despite 37.5% Spending Decline

The Central Bank of Nigeria, on Friday, published its Economic Report for the month of November 2019, showing that the Federal Government’s fiscal operations resulted in an estimated deficit of N218.05bn, compared with the monthly budget deficit of N159.87bn.

According to the CBN, while the Federal Government planned to spend N705.44bn during the review month, it only received N322.62bn as estimated retained revenue for the period, which was below the month’s budget by 54.3%.

Consequently, Abuja was forced to spend N540.67bn in estimated total expenditure, which also came 37.5% below the monthly budget estimate of N865.31bn, just as it was below the N776.87bn revenue recorded in October by 30.4%.

A breakdown of the total expenditure during the period showed that recurrent expenditure accounted for 88.7%, while capital expenditure and transfers constituted a meagre 4.1 and 7.2% respectively, in the review period. Of the recurrent expenditure, the report continued, the non-debt obligation was 74.1%, while debt service payments accounted for the balance of 25.9%.

Specifically, the estimated gross federally-collected revenue (gross) in November 2019 by 31.1% to N858.92bn from the previous month’s N1.246tr and that of the corresponding period of 2018 by N894.09bn, or 3.9%.

The CBN blamed the decline, relative to the monthly budget estimate, on the “shortfall in both oil and non-oil revenues.”

While oil receipts at N489.08bn or 56.9% of total revenue, was below both the N798.83bn monthly budget and the preceding month’s N577.3bn by 38.8% and 15.3%, respectively.

The fall in oil revenue, relative to the monthly budget estimate, the apex bank noted, “was attributed to shut-ins and shut-downs at some NNPC terminals.”

At N369.84bn or 43.1% of total revenue, it noted that non-oil receipt came “below the monthly budget of N447.24 billion by 17.3%. It, however, exceeded the preceding month’s earning of N316.79bn by 16.7%. The drop in the collection, relative to the monthly budget, was due to the decline in revenue from VAT, Education Tax and Federal Government Independent Revenue.

Of the net sum of N723.31 billion retained in the Federation Account, a total of N100.72bn, N26.88bn, and N23.65bn were transferred to the VAT Pool Account, Federal Government Independent Revenue, just as “Others”, respectively, leaving a net balance of N572.06bn for distribution to the three tiers of government and 13% Derivation Fund.

The Federal Government received N276.12bn, the state and local governments received N140.05bn and N107.98bn, respectively. The balance of N47.91bn was shared among the oil-producing states, as a 13% Derivation Fund.

From the N100.72bn transferred to the VAT Pool Account, the Federal Government received N15.11 billion, while the state and local governments received N50.36bn and N35.25bn, respectively, among others.

In all, total allocation to the three tiers of government from the Federation Account and VAT Pool Account in November 2019, amounted to N682.59bn, which was below the monthly budget estimate of N1.09tr by 37.4%.