The Central Bank of Nigeria (CBN) confirmed on Sunday that the Federal Government recorded a fiscal shortfall of N1.29 trillion in the third quarter (Q3) of this year.
The apex bank disclosed this in its third-quarter economic report.
The report said: “At N2.27 trillion, federally collected revenue in the third quarter of 2020 grew by 4.5 percent, over the level in the preceding quarter.
“However, it was below collections recorded in the same quarter of 2019 and the budget benchmark by 22.1 percent and 10.7 percent respectively. Oil receipt accounted for 42.0 percent of the total collection while non-oil revenue made up the balance of 58.0 percent.
The relatively weak oil receipts emphasised the impact of the COVID-19 pandemic on crude prices, resulting in a decline in the Nigerian government finances. Oil accounts for about 65 percent of Nigerian government’s revenue.
“The retained revenue of the Federal Government of Nigeria at N842.09 billion fell short of the budget benchmark and the level in the third quarter of 2019 by 42.3 percent and 35.7 percent, respectively. The provisional Federal Government expenditure in the period was N2.13 trillion, representing a shortfall of 21.1 percent, relative to the budget.
“The decline in expenditure underscores the imperative of prioritising spending amidst persisting revenue challenges. Consequently, the fiscal operations of the Federal Government resulted in an estimated deficit of N1.29 trillion.”
As of half year end, the total debt of the Nigerian government came to N26.81 trillion, according to the report, with local and external debts making up 57.6 percent and 42.4 per cent of the total debt portfolio respectively.
The CBN noted that improvement in economic activities prior to the lifting of COVID-19 lockdown triggered a 4.5 percent expansion in the federation revenue in the third quarter compared to the second quarter figure.
It added that the federation revenue receipt at N2.27 trillion was lower than both the budget benchmark of N2.54 trillion by 10.7 percent and the third quarter 2019 collection of N2.91 trillion by 22.1 percent.