FG’s deficit spending up 33% to over N7trn in 11 months

Nigeria’s Federal Government has recorded a budget deficit of N7. 052 trillion in the eleven months ending November 2021, representing 33 per cent increase when compared with the N5.32 trillion recorded in the corresponding period of 2020.

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who disclosed this yesterday at the Public Presentation of 2022 budget, in Abuja, noted that deficit recorded represents 9.2 per cent above the N6.449 trillion aggregate deficit in the 2021 budget.

The minister said that at the end of November, deficit spending had risen to N7.052 trillion, instead of the prorata figure of N 5.911 trillion.

Ahmed said the 2021 budget implementation report was provisional, capturing only the first 11 months, an indication that the deficit figure could be higher when the budget implementation report for the full year is concluded.

According to her, as at November 2021, the federal government aggregate revenue was N5.51 trillion (74% of target), justified the deficit spending, as according to her, it would not have been possible for the economy to exit the recent recession without such a strategy.

“Having witnessed two economic recessions we have had to spend our way out of recession, which contributed significantly to the growth in the public debt. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt,” she said.

The minister who gave details of the 2021 budget performance noted that the federal government share of oil revenues was N970.3 billion (representing 53% performance of the prorated sum in the 2021 budget).

“FGN share of non-oil tax revenues totalled N1.62 trillion (118.8% over and above the target). Companies Income Tax (CIT) and Value Added Tax (VAT) collections were N718.58 billion and N360.56 billion, representing 115% and 165% respectively of the prorata targets for the period,” she said, noting that non-oil revenue exceeded its target of N1.488 trillion, as it recorded N1.621 trillion, showing a positive variance of N256.4 billion or 18. 8 per cent increase.

Out of the N2.011 trillion oil revenue forecast in the 2021 budget, the sum of N1.843 trillion should have been realized as at the end of November. However, only N970.33 billion was recorded, indicating a shortfall of about 47 per cent.

“On the expenditure side, N12.56 trillion (or 94.1%) has been spent out of the N13.57 trillion prorata budget. This performance is inclusive of expenditure estimates of the GOEs but exclusive of project-tied loans.

“Of the expenditure, N4.20 trillion was for debt service, and N3.02 trillion for Personnel costs, including Pensions.

“As at November 2021, N3.40 trillion had been expended for capital. Of this, N2.98 trillion represents 83 per cent of the provision for MDAs’ capital, N369.9 billion for Multilateral / Bilateral project-tied loans, and N49.52 billion as GOEs capital expenditure.”

The minister was elated by growth in the non-oil sector, saying that the sector showed greater resilience, recording 5.44 per cent in real terms during the reference quarter (Q3 2021).

She said, “In real terms, the non-oil sector contributed 92.51 per cent to GDP in Q3 2021, higher from the share recorded in the Q3 2020 which was 91.27.

“As at November, 2021, we had surpassed all collections for FGN independent revenues from 2017 to date. This reflects performance of our revenue growth initiatives for this revenue stream.

“We have now for the first time surpassed the N1 trillion mark collection for independent revenues (N1.104 trillion collected as at November against a budget target of 973.41 billion). Analysts have always considered our projections unrealistic, but we have always insisted on the potentials that exist to grow FGN independent revenue.”