Data obtained from the fourth quarter Economic Report of Central Bank of Nigeria revealed that the Federal Government recorded a fiscal deficit of N2.14tn in its operations in the 2017 fiscal period.
A fiscal deficit occurs when a government’s total expenditure exceeds the revenue that it generates, excluding borrowings.
An analysis of the report showed that the fiscal deficit for the 2017 financial year was lower than the N2.19tn recorded in 2016.
The report put the total retained revenue of the Federal Government during the period at N2.76tn, while the expenditure was put at N4.9tn, resulting in overall operational deficit of N2.14tn.
Investigations showed that the deficit was financed through domestic and foreign borrowings, including issuance of government securities.
Further analysis of the report showed that while the Federal Government earned N554.63bn in the first quarter of 2017, it incurred an expenditure of N1.34tn, resulting in a first quarter deficit of N782.96bn after the addition of primary deficit of N158.8bn.
For the second quarter, the sum of N688.69bn was earned by the Federal Government, with an expenditure of N1.17tn, resulting in a deficit of N489.33bn after adding the primary deficit of N185.74bn.
The report put the third quarter revenue of government at N788.56bn, adding that when matched with the N1.4tn expenditure for the period, it resulted into a deficit of N618.66bn.
For the fourth quarter, the government earned N731.61bn as revenue. However, with an expenditure of N979.05bn and a primary surplus of N197bn, the overall deficit for the quarter was put at N247.44bn.
The report read in part, “Provisional Federal Government retained revenue for the fourth quarter of 2017 was estimated at N731.61bn. This was below the proportionate quarterly budget estimate and the receipts in the preceding quarter by 45.8 per cent and 7.2 per cent, respectively.
“Of the total revenue, the Federation Account accounted for 87.2 per cent, while Value Added Tax, Federal Government Independent Revenue and exchange gain accounted for 5.0, 4.5 and 3.3 per cent, respectively.
“The estimated Federal Government expenditure for the fourth quarter of 2017 was N979.05bn. This was below the proportionate quarterly budget estimate of N1.93tn by 49.5 per cent and the level in the preceding quarter by 30.4 per cent.
“A breakdown of the total expenditure showed that the recurrent component accounted for 81.7 per cent, while capital and statutory transfers accounted for 9.6 and 8.7 per cent, respectively.
“A further breakdown of the recurrent expenditure showed that the non-debt component accounted for 44.4 per cent, while debt service payment was 55.6 per cent.”
Finance and economic experts advised that the budgetary spending of the government needs to be reduced in a manner that would reflect the rate of revenue inflow.