•Overshoots 2024 deficit target by 31%
Deficit spending by the Federal Government rose by 28 per cent, Year-On-Year, YoY to N12.1 trillion in the first ten months of 2024, from N9.8 trillion recorded in the same period of 2023.
Thus, the Federal Government, in the first ten months, surpassed its Budget 2024 deficit target of N9.8 trillion by 31 per cent.
The increase in deficit spending was in spite 36 per cent YoY increase in FG’s revenue during the period.
The increase in FG’s revenue was driven by a 54.5 per cent YoY increase in revenue to the Federation Account during the 10 months period.
Vanguard analysis of data in the Central Bank of Nigeria, CBN, Monthly Economic Reports, showed that revenue to the Federation Account rose to N20.214 trillion in the 10 months, 10m’24, from N13.079 trillion in the same period in 2023, 10m’23.
From N4.973 trillion in the first quarter, Q1’24, revenue to the Federation Account rose quarter-on-quarter, QoQ, to N6.388 trillion in Q2’24. It rose further by 7.5 per cent QoQ to N6.865 trillion in Q3’24. However in October, revenue to the Federation Account fell Month-on-Month, MoM by 7.9 per cent to N1.988 trillion.
Analysis of the fiscal activities of the FG showed that in the first quarter of 2024 (Q1’24), deficit spending stood at N4.18 trillion and grew by 1.9 percent quarter-on-quarter (QoQ) to N4.26 trillion in Q1’24.
In Q3’24 deficit spending fell by 23 percent to N3.3 trillion. In October 2024, deficit spending stood at N361.89 billion.
The report also showed that the FG recorded 36.6 percent YoY growth in revenue to N6.86 trillion in 10m’24 from N5.02 trillion in 10m’23.
QoQ revenue grew by 71 percent to N2.4 trillion in Q2’24 from N1.4 trillion in Q1’24.
In Q3’24, revenue fell by 4.2 percent QoQ to N2.3 trillion. In October 2024, revenue stood at N763.79 billion.
The report also showed that expenditure grew by 17.8 percent QoQ to N6.7 trillion in Q2’24 from N5.6 trillion in Q1’24. In Q3’24, expenditure dropped by 16.4 percent QoQ to N5.6 trillion.
In October, expenditure rose MoM by 28.4 percent to N1.83 trillion from N1.43 trillion in September.
In its Economic Report for October, the apex bank said: “From the federally collected revenue of N1, 988.47 billion, a net balance of N1,298.87 billion was distributed to the three tiers of government after accounting for additional revenue and statutory deductions and transfers. The federal, state, and local governments received N424.87 billion, N450.96 billion and N332.63 billion, respectively, while the balance of N90.42 billion was allocated to the 13% Derivation Fund for oil-producing states. Net disbursement was 7.90 per cent above the level in the preceding month, but was 43.76 per cent short of the target.
“At N1.83 billion, provisional aggregate expenditure in October 2024 was 28.43 per cent above the level in the preceding month, but 23.6 per cent short of the target of N2.4 trillion.The rise in expenditure was attributed, largely, to the higher capital spending which rose by N463.49 billion relative to the preceding month, but was short of the target by 44.03 per cent.
“FGN retained revenue rose during the review period owing, largely, to higher receipts from FGN’s share of excess non-oil revenue. At N763.79 billion, provisional FGN retained revenue was 6.07 per cent above the level in the previous month but 53.23 per cent short of the target.
“The overall fiscal balance of the FGN expanded in October 2024 Provisional data showed that primary deficit and overall deficit widened by N362.85 billion and N361.89 billion, respectively, relative to the preceding month. “The expansion reflected a higher increase in expenditure relative to revenue, underscoring the need to improve fiscal space through the broadening of the tax base and diversified revenue streams.”
Vanguard