The Federal Government recorded a deficit of N725.18 billion in its fiscal operations in the first quarter of 2016, according to data released, yesterday, by the Central Bank of Nigeria, CBN. The CBN, in its Economic Report for the First Quarter of 2016, attributed the deficit to an expenditure of N1.23 trillion, over retained earnings of N505.1 billion in the period under review.
The deficit, the report said, was as a result of a decline in oil and non-oil revenues and a rise in capital expenditure in the quarter under review.
The dip in oil earnings was attributed to a sharp drop in oil and gas export, low price of crude oil in the international market and the persistent disruption in petroleum export due to vandalisation and production shut-ins.
According to the report, the estimated fiscal deficit of N725.18 billion indicated an increase of 178.6 per cent above the 2015 provisional quarterly budget deficit of N260.25 billion.
The CBN also stated that the Federal Government’s expenditure for the first quarter was 3.4 per cent higher than the provisional quarterly budget estimate, but was below level in the fourth quarter of 2015 by 20.3 per cent.
Specifically, breakdown of total expenditure showed that recurrent expenditure accounted for 72.8 per cent of the total, while capital and statutory transfers accounted for 18 and 9.2 per cent, respectively.
In the recurrent expenditure aspect, the report noted that non-debt component accounted for 72.7 per cent, while debt service payments accounted for the balance of 27.3 per cent.
Using provisional data, the CBN further stated that the Federal Government’s retained revenue for the first quarter of 2016, of N505.07 billion was below the receipts in the fourth quarter of 2015 by 37.5 per cent.
Giving a breakdown of the Federal Government’s total revenue, the report disclosed that Federation Account accounted for 81.6 per cent of the total, while Federal Government Independent Revenue, Value Added Tax, VAT, and others, comprising the Nigerian National Petroleum Corporation’s NNPC, Refund and Exchange Gain, accounted for 8.0, 5.6 and 4.8 per cent, respectively.
Furthermore, the CBN in its analysis of Federation Account operations, disclosed that total revenue collected in the first quarter of 2016 stood at N1.269 trillion, dropping by 18.05 per cent from N1.548 trillion recorded in the fourth quarter of 2015, and was also lower than the 2015 quarterly budget estimate of N2.445 trillion by 48.1 per cent.
According to the CBN, the decline in gross federally-collected revenue relative to the budget estimate was attributed to the shortfall in receipts from both oil and non-oil revenue during the review quarter.
Particularly, Nigeria’s oil earnings dipped by 19.82 per cent to N66.13 billion in the first quarter, compared to oil receipts of N830.81 billion in the previous quarter, while non-oil earnings also declined by 15.99 per cent from N717.16 billion in the fourth quarter of 2015 to N602.46 billion in the quarter under review.
The CBN said, “The decline in oil revenue relative to the budget estimate was attributed to the persistent fall in receipts from crude oil/gas export, due to the continous drop in the price of crude oil in the international market as well as series of shut-ins and shut-downs at some NNPC terminals owing to pipeline vandalism and repairs during the review quarter.
“The decline in non-oil revenue relative to the provisional budget estimate was due, largely, to the fall in receipts from all of its components except Customs Special Levies (Non-Federation Account) during the review quarter.”
