The Central Bank of Nigeria (CBN) says the federal government recorded N2.23 trillion fiscal deficit in the fourth quarter (Q4) of 2021.
The apex bank said this in its economic report for the fourth quarter of 2021.
A fiscal deficit is a shortfall in a government’s income compared with its spending. By implication, a high fiscal deficit means that the government is spending beyond its means.
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The report said the 12 per cent contraction in fiscal deficit followed a decline in aggregate expenditure in the fourth quarter of 2021.
“Following a decline in aggregate expenditure in the fourth quarter of 2021, the fiscal deficit of the FGN contracted by 12.0 per cent to N2,232.33 trillion, relative to the preceding quarter,” the report states.
“Non-oil revenue maintained its dominance, accounting for 60.8 per cent of the total collections, while oil revenue constituted the balance of 39.2 per cent.
“Provisional Federal Government of Nigeria (FGN) retained revenue, at N1,265.34 trillion, declined by 36.6 per cent and 3.2 per cent, relative to the budget benchmark and the preceding quarter, respectively, reflecting the persistent revenue challenge over the past two years.”
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The report added that the federation receipts in the fourth quarter fell below benchmark due to the shortfalls in oil revenue.
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“The shortfalls were largely the result of poor performances in some oil revenue components. Non-oil maintained its dominance of gross federation receipts in the period, accounting for 60.8 per cent of the total collections, while oil revenue constituted the balance of 39.2 per cent,” the report added.
“This is a deviation from the 51:49 non-oil versus oil revenue mix, projected in the 2021 budget.
“Federation receipts in the fourth quarter of 2021 declined, following shortfalls in oil revenue. At N2,844.73 trillion, provisional federation receipts fell below the quarterly benchmark and the level in the preceding quarter by 7.5 per cent and 0.7 per cent, respectively,” the report added.
According to the report, growth prospects for the Nigerian economy remain positive but fragile in the near term, on the back of a rebound in manufacturing activities, improvements in vaccination rates, and the supportive impact of CBN interventions on growth-enhancing sectors.
CBN, however, said the lingering security challenges and the delayed implementation of the Petroleum Industry Act (PIA) are the major downside risks to the outlook.