The federal government posted a fiscal deficit of N488.24 billion in April, 169% higher than the benchmark, the Central Bank of Nigeria (CBN) said Tuesday.
“The fiscal operations of the Federal government in April 2020 resulted in a deficit of N488.24bn compared with the N181.27bn benchmark and its levels of N854.12bn and N690.54bn in March 2020 and April 2019 respectively.
“The observed moderation in the overall fiscal deficit in April, relative to comparable periods, could be attributed to the 16.3 per cent increase in revenue, and the 29.6 per cent decline in expenditure”, the CBN monthly economic report for April, issued on Tuesday, said.
Even though the April revenue shortfall was substantially above the benchmark, the report warned that it could worsen in the months ahead given the pessimism surrounding the infection curve of COVID-19 and the downturn in economic activities which could trigger extra-budgetary spending funded by new borrowings.
Foreign income into Africa’s biggest oil-producing nation has been coming in dribs and drabs following the recent oil crash and the coronavirus pandemic batter an economy already starved of the vital recipe for growth.
The CBN report indicated that total retained revenue of N285.66 billion reported in April fell 59.3 per cent short of its benchmark.
Receipts in April outstripped collections in March by 16.4 per cent. However, it was lower than the collections for the same period of 2019 by 14.8 per cent.
The total expenditure of the Nigerian government in April dropped below its budget benchmark and the levels in March and the corresponding period of 2019.
This derived from delays in capital releases, moderation in overhead costs triggered by the lockdown of government offices and concessional cessation of interest obligations as part of measures taken to contain the impact of COVID-19 on businesses.
The Nigerian government’s expenditure, which stood at N773.90 billion in April, was 12.3 per cent below its benchmark and 29.6 per cent and 24.6 per cent below total spending in March 2020 and April 2019 respectively.
There were declines in both the capital and the recurrent expenditures for April.
Source: Ripples Nigeria