The Federal Government recorded a deficit of N725.18 billion in its fiscal operations in the first quarter of 2016, according to data released yesterday by the Central Bank of Nigeria, CBN. Nigeria also earned $1.02 billion from its non-oil exports during the period, and this represents an increase of 38.6 percent or $393.7 million (N78.7bn) over the amount earned in the same period of 2015.
The CBN, in its Economic Report for the First Quarter of 2016, attributed the deficit to an expenditure of N1.23 trillion, over retained earnings of N505.1 billion in the period under review. The deficit, the report said, was a result of a decline in oil and non-oil revenues and a rise in capital expenditure in the quarter under review. The dip in oil earnings was attributed to a sharp drop in oil and gas export, low price of crude oil in the international market and the persistent disruption in petroleum export due to vandalism and production shut-ins.
According to the report, the estimated fiscal deficit of N725.18 billion indicated an increase of 178.6 percent above the 2015 provisional quarterly budget deficit of N260.25 billion. The CBN also stated that the Federal Government’s expenditure for the first quarter was 3.4 percent higher than the provisional quarterly budget estimate, but was below level in the fourth quarter of 2015 by 20.3 percent.
Specifically, a breakdown of total expenditure showed that recurrent expenditure accounted for 72.8 percent of the total, while capital and statutory transfers accounted for 18 and 9.2 percent, respectively. In the recurrent expenditure aspect, the report noted that non-debt component accounted for 72.7 percent, while debt service payments accounted for the balance of 27.3 percent. Using provisional data, CBN further stated that the Federal Government’s retained revenue for the first quarter of 2016, of N505.07 billion was below the receipts in the fourth quarter of 2015 by 37.5 percent.
Giving a breakdown of government’s total revenue, the report disclosed that Federation Account accounted for 81.6 percent of the total, while Independent Revenue, Value Added Tax, VAT, and others, comprising the Nigerian National Petroleum Corporation, NNPC’s Refund and Exchange Gain, accounted for 8.0, 5.6 and 4.8 percent, respectively.