The recent economic report released by the Central Bank of Nigeria (CBN) over the weekend, revealed that the Federal Government of Nigeria (FGN) incurred a fiscal deficit of N1.430 trillion in the first quarter of 2023.
This deficit represents a 9.6 percent increase from the last quarter of 2022 but is 22.1 percent lower than the government’s target.
In its official report, the CBN noted, “The fiscal operations of the FGN in 2023, first quarter, resulted in a deficit. At N1.43 trillion, the provisional fiscal deficit of the FGN was 9.6 per cent higher than the level in the preceding quarter but 22.1 percent below the target.”
The report further highlights that the fiscal performance for first quarter 2023 was negatively impacted by a significant reduction in oil revenue. Consequently, the retained revenue of the FGN experienced a decline of 10.7 percent when compared to the last quarter of 2022 and fell short of the quarterly target by 46.1 percent.
Aggregate expenditure by the FGN also registered a decline, with a 1.3 percent decrease relative to the preceding quarter and a 36.0 percent reduction compared to the quarterly target.
“Thus, the FGN overall deficit widened relative to 2022, fourth quarter, but narrowed by 22.1 per cent when compared with the proportionate budget. Consolidated public debt, as at end-December 2022, stood at N46.25 trillion or 22.8 percent of Gross Deposit Products (GDP.”
Gross federation revenue for the period totaled to N3.48 trillion, falling short of the levels in the last quarter of 2022 by 0.4 percent and the budget benchmark by 26.6 percent.
Notably, non-oil revenue continued to dominate government revenue, contributing 61.4 percent, while oil receipts accounted for the remaining 38.6 percent.
Oil revenue, at N1.34 trillion, declined by 3.0 percent compared to the last quarter of 2022 and by 43.5 percent relative to the quarterly target. This decline was primarily attributed to revenue shortfalls from petroleum profit tax and royalties due to lower domestic crude production. Conversely, non-oil receipts, totaling N2.14 trillion, showed a 1.2 percent improvement compared to the preceding quarter but fell short of the quarterly target by 9.6 percent, amounting to N2.37 trillion.
The CBN report underscores the challenges faced by the Federal Government in managing its finances during the first quarter of 2023, primarily driven by reduced oil revenue and expenditure constraints. These fiscal dynamics will continue to be closely monitored by government officials and economists as Nigeria navigates its economic path in the coming months
