During the first quarter of 2023, the Federal Government of Nigeria faced a fiscal challenge as its expenditures surpassed its revenue by N1.43tn.
This figure, obtained from the Central Bank of Nigeria’s economic report for the third quarter of 2023, represented a 9.6% increase compared to the previous quarter of 2022.
The report revealed, “In Q1 2023, the fiscal operations of the Federal Government resulted in a deficit of N1.43tn.
This deficit was not only 9.6% higher than the previous quarter but also 22.1% lower than the targeted deficit.”
The main reason behind this deficit was the reduced revenue from oil, which caused the Federal Government’s retained revenue to decrease by 10.7% compared to the fourth quarter of 2022, falling 46.1% below the quarterly target.
Furthermore, the Federal Government’s total expenditure also experienced a decline, dropping by 1.3% compared to the previous quarter and a significant 36.0% below the quarterly target.
In conclusion, while the Federal Government’s overall deficit widened in comparison to the last quarter of 2022, it still managed to narrow it down by 22.1% when compared to the budget allocation.
It’s important to note that as of the end of December 2022, the consolidated public debt stood at N46.25tn, which was equivalent to 22.8% of GDP.
The report highlighted that gross federation revenue in Q1 2023 was N3.48tn, falling short of both the levels in the last quarter of 2022 and the budget benchmark by 0.4% and 26.6%, respectively.
Non-oil revenue played a significant role, accounting for 61.4% of government revenue, while oil receipts made up the remaining 38.6%.
However, oil revenue, at N1.34tn, experienced a decline of 3.0% compared to the last quarter of 2022 and a substantial 43.5% below the quarterly target due to shortfalls in petroleum profit tax and royalties, caused by lower domestic crude production.
On the other hand, non-oil receipts, totaling N2.14tn, showed a slight improvement of 1.2% compared to the preceding quarter but still fell short by 9.6% of the quarterly target of N2.37tn.
