**Date**: September 1, 2023
*Abuja, Nigeria*:
The Central Bank of Nigeria (CBN) has reported that in the first three months of 2023, the Federal Government of Nigeria’s expenditure surpassed its revenue by a significant margin, resulting in a deficit of N1.43tn. This figure represents a 9.6 percent increase compared to the deficit recorded in the last quarter of 2022.
According to the CBN’s economic report for the third quarter of 2023, released on Friday, the fiscal operations of the Federal Government in the first quarter of the year resulted in this deficit. While the deficit grew by 9.6 percent relative to the previous quarter, it was still 22.1 percent below the target set for the period.
The report attributes the fiscal performance in the first quarter of 2023 to a lower realization of oil revenue. As a consequence, the retained revenue of the Federal Government fell by 10.7 percent compared to the fourth quarter of 2022 and was 46.1 percent below the quarterly target.
Additionally, the Federal Government’s aggregate expenditure also decreased, by 1.3 percent relative to the preceding quarter and by a substantial 36.0 percent in comparison to the quarterly target.
The widening overall deficit of the Federal Government is noted in the report when compared to the fourth quarter of 2022, although it has decreased by 22.1 percent when measured against the proportionate budget.
The report further reveals that Nigeria’s consolidated public debt stood at N46.25tn as of the end of December 2022, representing 22.8 percent of the Gross Domestic Product (GDP).
Gross federation revenue in the first quarter of 2023 was reported at N3.48tn, falling short of the levels recorded in the fourth quarter of 2022 by 0.4 percent and by a substantial 26.6 percent below the budget benchmark.
Non-oil revenue continued to play a dominant role, accounting for 61.4 percent of government revenue, while oil receipts constituted the remaining 38.6 percent. However, oil revenue saw a decline, reaching N1.34tn, a decrease of 3.0 percent compared to the fourth quarter of 2022 and a significant drop of 43.5 percent below the quarterly target. This decline was attributed to revenue shortfalls from petroleum profit tax and royalties due to lower domestic crude production.
On the other hand, non-oil receipts improved modestly in the first quarter, reaching N2.14tn, an increase of 1.2 percent compared to the preceding quarter, although it still fell short of the quarterly target by 9.6 percent.
These figures indicate a challenging fiscal landscape for the Nigerian Federal Government, which continues to grapple with revenue shortfalls, particularly in the oil sector, leading to substantial deficits in its budgetary operations.
