The Federal Government’s deficit spending increased by 28% Year-on-Year, reaching N12.1 trillion in the first ten months of 2024.
According to data from the Central Bank of Nigeria (CBN) Monthly Economic Reports, this marked an increase from N9.8 trillion in the same period in 2023.
This also revealed that the Federal Government exceeded its 2024 budget deficit target of N9.8 trillion by 31%.
Despite a 36% Year-on-Year growth in revenue during the same period, the deficit spending continued to rise.
In the first quarter of 2024 (Q1’24), deficit spending was N4.18 trillion, and it increased by 1.9% quarter-on-quarter (QoQ) to N4.26 trillion in Q2’24. However, in Q3’24, deficit spending fell by 23% to N3.3 trillion, with October 2024 recording N361.89 billion.
Revenue to the Federation Account surged by 54.5% YoY, reaching N20.214 trillion in the first ten months of 2024, up from N13.079 trillion in the same period of 2023.
Revenue grew from N4.973 trillion in Q1’24 to N6.388 trillion in Q2’24, marking a QoQ increase. It further rose by 7.5% QoQ to N6.865 trillion in Q3’24. However, in October, revenue to the Federation Account fell by 7.9% MoM to N1.988 trillion.
The Federal Government recorded a 36.6% YoY increase in revenue, reaching N6.86 trillion in 10m’24, compared to N5.02 trillion in 10m’23. QoQ, revenue grew by 71% to N2.
In its Economic Report for October, the apex bank said: “From the federally collected revenue of N1,988.47 billion, a net balance of N1,298.87 billion was distributed to the three tiers of government after accounting for additional revenue and statutory deductions and transfers. The federal, state, and local governments received N424.87 billion, N450.96 billion and N332.63 billion, respectively, while the balance of N90.42 billion was allocated to the 13% Derivation Fund for oil-producing states. Net disbursement was 7.90 per cent above the level in the preceding month but was 43.76 per cent short of the target.
“At N1.83 billion, provisional aggregate expenditure in October 2024 was 28.43 per cent above the level in the preceding month, but 23.6 per cent short of the target of N2.4 trillion.
“The rise in expenditure was attributed, largely, to the higher capital spending which rose by N463.49 billion relative to the preceding month, but was short of the target by 44.03 per cent.
“FGN retained revenue rose during the review period owing, largely, to higher receipts from FGN’s share of excess non-oil revenue. At N763.79 billion, provisional FGN retained revenue was 6.07 per cent above the level in the previous month but 53.23 per cent short of the target.
“The overall fiscal balance of the FGN expanded in October 2024. Provisional data showed that primary deficit and overall deficit widened by N362.85 billion and N361.89 billion, respectively, relative to the preceding month. “The expansion reflected a higher increase in expenditure relative to revenue, underscoring the need to improve fiscal space through the broadening of the tax base and diversified revenue streams.”