An estimated deficit of N100.33 billion was recorded in the fiscal operations of the Federal Government at the end of the third quarter of this year, the Central Bank of Nigeria (CBN) has said.
The apex bank disclosed this in its Q3 2018 economic report posted on its website yesterday. According to CBN, at N2.52 trillion, federally collected revenue in the third quarter of 2018 was lower than the proportionate quarterly budget estimate of N3.32 trillion by 24.0 per cent, but was higher than the receipt in the preceding quarter by 8.9 per cent. Besides, it stated: “The Federal Government retained revenue for the review quarter was N950.61 billion, while total estimated expenditure amounted to N1,050.94 billion, resulting in an estimated deficit of N100.33 billion.”
Nigeria had proposed a fiscal year spending target of N9.1 trillion and experts have said that the country would have to continue borrowing from the domestic market to be able to achieve 85 per cent level of implementation for this year’s budget.
CBN explained in the report that the decline in federally-collected revenue (gross) relative to the proportionate quarterly budget estimate deficit of N488.62 billion was attributed to the shortfall in both oil and non-oil revenue components in the review period. Specifically, the report stated: “Gross oil receipt at N1,394.19 billion or 55.2 per cent of the total revenue was below the proportionate quarterly budget estimate by 27.4 per cent.
It also fell marginally below the receipts in the second quarter of 2018 by 0.3 per cent. “Despite the increase in crude oil price, oil revenue declined relative to the proportionate budget owing to shortfalls in crude oil production and exports, arising from leakages and shut-ins/shut-downs at some NNPC terminals,” the study added.
Similarly, the CBN report stated: “Non-oil revenue, at N1,130.39 billion or 44.8 per cent of total, was below the proportionate quarterly budget estimate of N1,400.74 billion by 19.3 per cent. It was, however, above the level in the preceding quarter by 22.8 per cent.
“The lower non-oil revenue relative to the proportionate quarterly budget estimate was due to the shortfalls in receipt from Federal Government Independent Revenue and VAT in the review period,” it said. Giving further details on the Federal Government’s expenditure in the review period, CBN noted that government’s estimated expenditure for the third quarter of 2018 stood at N1,050.94 billion and was below the proportionate quarterly budget estimate of N2,376.93 billion by 55.8 per cent
According to the regulator, this was, however, above the level in the preceding quarter by 6.3 per cent. A breakdown of the total expenditure showed that the recurrent component accounted for 82.4 per cent, while capital and statutory transfers accounted for 12.5 and 5.1 per cent, respectively.
Further analysis of the recurrent expenditure indicates that the non-debt component accounted for 40.9 per cent, while debt service payment was 59.1 per cent.
Meanwhile, CBN has disclosed that it sold a total of $11.88 billion to authorised dealers in the third quarter of 2018. It noted that this represented 24.0 per cent and 83.1 per cent increase above the levels in the preceding quarter and the corresponding period of 2017, respectively. It attributed the development, relative to the preceding quarter, to activities at the Importers and Exporters Window (I & E window) and increase in foreign exchange sales to BDCs in the review quarter.
Specifically, the banking watchdog stated: “Of the total, foreign exchange forwards disbursed at maturity was $3.24 billion (27.3 per cent); I&E window, $2.84 billion (23.9 per cent); sales to BDCs, $2.41 billion (20.3 per cent); interbank sales, $2.16 billion (18.2 per cent) and swaps transactions, $1.23 billion (10.3 per cent).”
