Nigeria’s Fiscal Deficit Hits N4.53 Trillion in Q2 2024 as Spending Outpaces Revenue Growth
Nigeria’s fiscal deficit reached N4.53 trillion in the second quarter of 2024, up from N3.88 trillion in the first quarter, underscoring a widening gap between federal government spending and revenue. According to the Central Bank of Nigeria (CBN), this growing deficit signals financial strain, with expenditures consistently exceeding income from taxes, oil revenues, and other sources. Despite a 57.66% increase in revenue remittance to N2.3 trillion, the collection fell short of government targets by 52.49%, heightening reliance on deficit financing.
The report attributes the surge in government spending to rising interest payments on debts, with total federal expenditures reaching N6.83 trillion a 27.79% increase from the prior quarter. A breakdown of spending reveals that 89.7% of funds were allocated to recurrent expenses, such as salaries and pensions, while only 3.66% went to capital expenditures, stifling infrastructure investments crucial for long-term growth.
Experts warn that the current allocation strategy prioritizes immediate operational costs over sustainable development, underscoring the need for Nigeria to boost revenue collection and enforce fiscal discipline. Analysts recommend that the government adopt more robust revenue-generation strategies to bridge the deficit, reduce debt dependence, and achieve a balanced fiscal future.
