In January 2024, the Federal Government’s deficit spending increased by 8.0 percent year-on-year, reaching N1.07 trillion, up from N980 billion in January 2023.
This deficit was also 18.6 percent higher than the amount allocated in the 2024 approved budget, as reported by the Central Bank of Nigeria (CBN) in its monthly Economic Report for January 2024.
Despite this annual increase, the report indicated a 3.4 percent month-on-month decline in deficit spending, from N1.102 trillion in December 2023. This reduction was attributed to decreased spending on foreign debt service.
The CBN stated: “The fiscal operations of the Federal Government in January resulted in a contraction in the fiscal deficit. The provisional fiscal deficit of the FGN, at N1.07 trillion, narrowed by 3.4 percent relative to the preceding month, but was 18.6 percent over the benchmark.
“The lower deficit, relative to the preceding month, reflected less spending on foreign debt service.”
The report also highlighted that a lower realization of exchange gains and statutory allocations led to a 47 percent shortfall in the Federal Government’s revenue target for January 2024, set at N920 billion.
The CBN noted that the Federal Government’s retained revenue fell year-on-year by 2.2 percent to N487.5 billion in January 2024 from N498.6 billion in December 2023. On a month-on-month basis, retained revenue declined by 1.7 percent from N495.8 billion in December 2023. This decline was due to lower exchange gains and statutory allocations realized in January 2024.
“At N487.48 billion, provisional FGN retained revenue was 1.7 percent lower than the collections in December 2023 and 47.0 percent short of the monthly target.”
Additionally, the report showed a 4.7 percent year-on-year increase in Federal Government expenditure, rising to N1.55 trillion in January 2024 from N1.48 trillion in January 2023. Month-on-month, expenditure declined by 2.6 percent from N1.59 trillion in December 2023.
The CBN explained: “The provisional aggregate expenditure of the FGN declined, owing to lower recurrent expenditure.
“At N1.55 trillion, provisional expenditure was 2.8 percent below the level in the preceding month and 14.6 percent short of the projected spending of N1.82 trillion.
“The decline was attributed largely to non-maturing debt obligations.
“Further analysis showed that recurrent expenditure accounted for 82.1 percent of total expenditure, compared with 12.8 and 5.1 percent for capital expenditure and transfers, respectively.”
