FG records N1.14 trillion budget deficit in three months

The Federal Government (FG) ran a deficit budget of N1.14 trillion in Q4 2019 compared to the N479.62 billion recorded in Q3 of 2019.

The Q4 2019 Economic Report released by the Central Bank of Nigeria disclosed that the government earned N938.72 billion and expended N2.07 trillion within 3 months leading to a deficit of N1.14 trillion. The government had projected to spend N2.59 trillion in the period under review. The projected amount, when compared with the actual amount spent, indicates a 20.1% shortfall.

Meanwhile, the N938.72 billion generated by the country was 55.6% and 46% below the quarterly budget estimate as well as revenue generated in Q3 2019 respectively.

The breakdown

Of the N938.72 billion, Federation Account accounted for 83.8% while Federal Government Independent Revenue, Value Added Tax (VAT), Exchange Gain and Non-oil Excess, accounted for 8.7%, 4.4%, 2.7%, and 0.4%, respectively.

Total expenditure showed that the recurrent component accounted for 73% while capital and statutory transfers accounted for 21.3% and 5.7% respectively.

Of the recurrent expenditure, debt service payments by the government were 25.9%.

Federally-collected revenue in Q4 of 2019 settled at N2.6 trillion which was lower than the quarterly budget of N3.76 trillion by 30.8%.

Meanwhile, the decline in federally-collected revenue (gross), relative to the quarterly budget, was attributed to shortfalls in both oil and non-oil revenues.

Gross oil revenue, at N1.56 trillion or 60.1% of the total receipts, was below the quarterly budget by 35.3% but above the receipt in the preceding quarter by 16.7%.

Gross non-oil revenue at N1.04 trillion fell below the quarterly budget of N1.34 trillion by 22.6% as well as below the level in the preceding quarter by 33.9%.

Statutory deductions and transfers of N517.67 billion and N450.46 billion were made, and a net sum of N1.63 trillion was retained in the Federation Account for distribution during the quarter.

The drop in non-oil revenue relative to the quarterly budget was due to the decline in the receipt from all its components, except customs and excise duties.

Of the N1.63 trillion retained the Federal Government received N786.35 billion; state and local governments received N398.85 billion and N307.49 billion, respectively.

The balance of N141.47 billion was transferred to the 13% Derivation Fund for distribution among the oil-producing states.

Additionally, the Federal Government received N41.46 billion while the state and local governments received N138.22 billion and N96.75 billion, respectively, from the VAT Pool Account.

Also, the sum of N8.7 billion was drawn-down from the Non-oil Excess Account and distributed among the Federal Government, N3.99 billion; state governments, N2.02 billion; local governments, N1.56 billion; and 13% Derivation Fund, N1.13 billion.

Similarly, N55.85 billion was shared as Exchange Gain, with the Federal Government getting N25.62 billion; state governments, N12.99 billion; local governments, N10.02 billion; and 13% Derivation Fund, N7.22 billion.

Meanwhile, the total statutory and VAT revenue allocation to the three tiers of government in the fourth quarter of 2019 amounted to N1.98 trillion, against the quarterly budget of N3.27 trillion.