THE Federal Government’s fiscal operations in the early part of this year have resulted into a 22.8 per cent rise in deficit spending in February 2023. The development was driven by a huge drop in oil revenue during the period.
The Central Bank of Nigeria, CBN, in its Monthly Economic Report, MER, for February 2023 released yesterday, indicated that the deficit during the month of February was N513.05 billion, bringing the total deficit for the first two months of 2023 to N931 billion.
The report indicated that the oil sector, which had recorded a growth of 31 per cent to N774.15 billion in January took a 60 per cent plunge to N308.07 billion in February.
The situation was not helped by a similar trend recorded for non-oil revenue, with a 3.7 per cent decline to N730.2 billion during the period.
As a result, revenue accruing to the Federation Account in February declined 32.3 % in February.
The CBN also reported that the expenditure side of the fiscal operations compounded the deficit position with a 5.9 percent increase in expenditure to N991.6 billion during the period.
The CBN stated: “At N1.038 trillion, federation receipts were below the level in January by 32.3 per cent. Similarly, it was below the budget of N1.580 trillion by 34.3 per cent.
“The decline relative to January was attributed to a fall in collections from Petroleum Profit Tax and Royalties. Oil revenue, at N308.07 billion, was 60.2 per cent below receipts in the preceding month.
“The outcome was driven, largely, by the 60.5 per cent decrease in collections from Petroleum Profit Tax and Royalties. Similarly, at N730.21 billion, non-oil revenue, was below the level in the preceding month and the monthly target by 3.7 per cent and 7.4 per cent, respectively.
“The decrease was largely attributed to the 10.5 per cent decline in collections from corporate tax on account of the seasonality associated with its payments
“At N478.57 billion, retained revenue of FGN was below the level in January and the proportionate budget by 7.7 per cent and 42.4 per cent, respectively.
“Provisional aggregate expenditure increased on account of the rise in both recurrent and capital expenditures. Consequently, the provisional aggregate expenditure of FGN at N991.62 billion rose by 5.9 per cent relative to the level in January and was 31.3 per cent below the monthly target.
“A breakdown of the expenditure reveals that recurrent expenditure, capital expenditure, and transfers accounted for 84.7 per cent, 9.5 per cent and 5.8 per cent of total expenditure, respectively.
“At N513.05 billion, the provisional fiscal deficit of the FGN rose by 22.8 per cent relative to the preceding month.
“However, it was 16.2 per cent below the budget benchmark.”