Kayode Tokede
The Central Bank of Nigeria (CBN) has disclosed that the federal government recorded a fiscal deficit of N699.4billion, after recording an aggregate expenditure of N1.09trillion and retained revenue of N394.11billion in July.
The apex bank in its economic report for July disclosed that the government in June 2021 recorded a deficit of N688.79billion when its aggregate expenditure was N1,004.25 billion and retained revenue of N315.46billion.
According to the report, the impact of improved revenue out-turn in July 2021 was weakened by 8.9 per cent growth in expenditure, triggering an expansion of the fiscal deficit.
The report said: “Payoffs from expenditure rationalisation and revenue mobilization efforts appeared subdued by new and rising non-discretionary spending, particularly on security and COVID-19 mitigation measures. Consequently, the provisional fiscal deficit of the FGN, at N699.48 billion, exceeded the position in June 2021 and the budget benchmark by 1.6 per cent and 49.8 per cent, respectively.”
The economic report by CBN explained that growth in FGN retained revenue was owing to the 60.4 per cent rise in receipt from the Federation Account.
“Retained revenue of the Federal Government increased by 24.9 per cent to N394.11 billion, relative to June 2021. Nonetheless, FGN receipts in July 2021 fell below the benchmark of N665.53 billion by 40.8 per cent, suggesting the prevalence of revenue challenge in the review period, ”the CBN said.
The report stated that improved earnings from petroleum profit tax and corporate income tax induced a significant rise in federation earnings in the review period. At N1,064.54 billion, federation receipt surpassed the level in June 2021 and the budget benchmark by 38.5 per cent and 3.9 per cent, respectively, driven by non-oil receipts.
It explained that the growth in non-oil receipts above the proportionate budget was an indication that the Strategic Revenue Growth Initiatives (SRGIs) of the FGN was beginning to yield the desired outcome.
The report added that: “Non-oil revenue constituted 61.3 per cent of the gross federally collected revenue, while oil revenue accounted for 38.7 per cent. Non-oil earnings in July, at N652.44 billion, exceeded both the proportionate budget estimate and June earnings by 25.8 per cent and 35.5 per cent, respectively”
On trade performance, the CBN’s report said: “Trade balance improved in July 2021, resulting from risk sentiments emanating from the spread of the Delta-variant of COVID-19, which subdued imports.
“A lower trade deficit of $0.34 billion was recorded in July 2021, compared with $2.40 billion in June 2021. Aggregate export increased marginally by 0.2 per cent to $4.45 billion, while total import declined significantly by 30.0 per cent to $4.80 billion, compared with $4.44 billion and $6.85 billion, respectively, in June 2021.
“Nigeria’s crude oil and gas export receipts decreased due largely to lower than-expected gas export. The value of crude oil and gas export decreased by 1.0 per cent to $3.99 billion, compared with $4.04 billion in June 2021.”
“A breakdown indicates that the value of gas export decreased by 17.9 per cent to US$0.46 billion. The decline in gas export was due, majorly, to the lower export of liquefied petroleum gas (LPG) in the review period. The value of crude oil export, on the other hand, increased by 1.7 per cent to $3.53 billion in July 2021.
“The increase in crude oil receipts was due, majorly, to improvement in both price and production to $75.93 pb and 1.50 mbpd in July 2021, relative to $73.46 pb and 1.47 mbpd in June 2021. Crude oil and gas exports component remained dominant, contributing 89.7 per cent of total exports, with oil accounting for 79.3 per cent and gas export 10.4 per cent, ”it stated.
