The fiscal operations of the Federal Government, in the last quarter of 2017 resulted in an estimated deficit of N247.44 billion, compared with the proportionate quarterly budget deficit of N589.19 billion. This fact is contained in the Central Bank of Nigeria fourth quarter economic report for 2017. The report said “provisional Federal Government retained revenue for the fourth quarter of 2017 was estimated at N731.61 billion. This was below the proportionate quarterly budget estimate and the receipts in the preceding quarter by 45.8 per cent and 7.2 per cent, respectively. Of the total revenue, Federation Account accounted for 87.2 per cent, while VAT, Federal Government Independent Revenue and Exchange Gain accounted for 5.0, 4.5 and 3.3 per cent, respectively.
“At N731.61 billion, the estimated FGN retained revenue was lower than the proportionate quarterly budget estimate by 45.8 per cent. The estimated Federal Government expenditure for the fourth quarter of 2017 was N979.05 billion. This was below the proportionate quarterly budget estimate of N1,937.98 billion by 49.5 per cent and the level in the preceding quarter by 30.4 per cent. A breakdown of the total expenditure showed that the recurrent component accounted for 81.7 per cent, while capital and statutory transfers accounted for 9.6 and 8.7 per cent, respectively.
“A further breakdown of the recurrent expenditure showed that the non-debt component accounted for 44.4 per cent, while debt service payments was 55.6 per cent. Total allocation to state governments from the Federation Account, including the 13.0 per cent Derivation Fund and the VAT Pool Account, was N578.05 billion in the review quarter. This was lower than the proportionate quarterly budget estimate by 31.9 per cent. A breakdown showed that the receipts from the Federation Account was N456.39 billion (79.0%), while the share from VAT pool account stood at N121.66 billion (21.0%).
The receipts from both the Federation and VAT Pool Accounts were 27.8 per cent and 43.7 per cent below the respective proportionate budget estimates. Total allocations to local governments from the Federation and VAT Pool Accounts in the fourth quarter of 2017 stood at N344.21 billion. This was below the proportionate quarterly budget estimate by 32.9 per cent. Of the total amount, allocation from the Federation Account was N259.05 billion (75.3%), while the VAT Pool Account stood at N85.16 billion (24.7%).”
The CBN in the report further said “Federally-collected revenue in the fourth quarter of 2017, at N2,040.59 billion, was lower than the proportionate quarterly budget estimate of N2,684.28 billion by 24.0 per cent. It was also below the receipts in the preceding quarter by 11.9 per cent. The decline in federally-collected revenue (gross) relative to the quarterly budget estimate was attributed to the shortfall in receipts from both oil and non-oil revenue during the review quarter. Gross federally – collected revenue fell by 11.9 per cent below the level in the third quarter of 2017.
“Gross oil receipt at N1,226.04 billion or 60.1 per cent of the total revenue, was lower than both the proportionate quarterly budget estimate and the receipts in the preceding quarter by 9.1 per cent and 3.5 per cent, respectively. The decline in oil revenue relative to the proportionate quarterly budget estimate was attributed to the fall in receipts from crude oil/gas exports. This was due to the drop in crude oil production, arising from leakages and shut-ins/shut-downs.
“At N814.55 billion or 39.9 per cent of the total, non-oil revenue (gross) fell below the proportionate quarterly budget estimate of N1,335.41 billion by 39.0 per cent. It was also below the level in the preceding quarter by 22.1 per cent. The lower non-oil revenue relative to the proportionate quarterly budget estimate was due to the shortfall in most of its components except Customs Special Levies (Federation Account component) during the review period. A net sum of N1,326.16 billion was retained in the Federation account after statutory deductions and transfers.
“Of this amount, the Federal Government received N637.73 billion, State and Local governments received N323.47 billion and N249.38 billion, respectively, while the balance of N115.58 billion was allocated to the 13.0% Derivation Fund for distribution among the oil-producing states. In addition, the Federal, State and Local Governments received N36.50 billion, N121.66 billion and N85.16 billion, respectively, from the VAT Pool Account. The sum of N1,326.16 billion of the gross federally collected revenue was distributed among the three tiers of government and the 13.0% Derivation Fund for oil producing states.
“In addition, the sum of N50.81 billion was distributed as Exchange Gain as follows: Federal Government, N24.24 billion; state governments, N12.98 billion; local governments, N9.48 billion; and 13% Derivation Fund, N4.8 billion. Similarly, the sum of N0.94 billion was drawn-down from the Non-oil Excess Account and distributed as follows: Federal Government, N0.50 billion; state governments, N0.25 billion; and local governments, N0.19 billion. Thus, the total statutory and VAT revenue allocation to the three tiers of government in the fourth quarter of 2017 amounted to N1,621.22 billion, compared with the proportionate quarterly budget estimate of N2,350.72 billion.”
