2018 Budget: Nigeria Records N1.1 Trillion Deficit in Eight Months
The Nigerian Government recorded a fiscal deficit of N1.14 trillion in its operations between January and August, figures obtained from the Budget Office of the Federation have revealed.
The 2018 budget which was signed by President Muhammadu Buhari had a total spending of N9.1 trillion made up of N2.87 trillion for capital expenditure, N3.51 trillion for recurrent (non-debt) expenditure while N2.01 trillion was projected to be spent on debt servicing.
The N9.1 trillion budget was expected to be financed from N2.99 trillion to be generated from oil revenue, N31.25 billion from Nigeria Liquefied Natural Gas dividend while N1.17 billion is expected to be realised through revenue from minerals and mining.
To fund the budget, the Nigerian Government had planned to generate N658.55 billion from Companies Income Tax; N207.51 billion from Value Added Tax; N324.86 billion from Customs while N57.87 billion was expected to come from federation account levies.
The government was expected to raise N847.95 billion through independent revenue from its agencies, while tax amnesty income, signature bonus and unspent balance from previous years were to provide N87.84 billion, N114.3 billion and N250 billion respectively
Details of the performance of the 2018 budget which was captured in the 2019 Budget Call Circular showed that as of the end of August, the Nigerian Government’s actual revenue was N2.48 trillion.
The budget circular, which was signed by the Minister of Budget and National Planning, Senator Udo Udoma, noted that the N2.48 trillion actual revenue represented about 52 per cent of the N4.78 trillion pro-rata budget.
It attributed the shortfall of 48 per to the underperformance of both oil and non-oil revenue sources.
The circular said, “The shortfall in Companies Income Tax collections may be partly due to seasonal factors as most companies remit their income taxes during the second half of the year.
“The slow recovery in economic activities that drive consumption and the lingering security issues contributed to the underperformance of other non-oil revenue sources like Value Added Tax.
“The delay in the implementation of other revenue initiatives like the restructuring of
JV (Joint Venture) oil assets and tighter performance management of Government Owned Enterprises further explain the weak non-oil revenue performance.”
In terms of expenditure, it said out of the total appropriation of N9.12 trillion, the sum of N3.64tn had been spent between January and August.
This, according to the document, represents a shortfall of about N2.44 trillion over the prorated expenditure sum of N6.08 trillion for January to August.
A breakdown of the N3.64 trillion showed that a total amount of N1.83 trillion had been released for non-debt recurrent expenditure for the payment of salaries, pensions, and overheads among others.
It said, “Releases for capital expenditure only commenced after the 2018 budget was signed into law on June 20, 2018.
“Revenue shortfalls and the need to meet non-discretionary recurrent spending such as payment of salaries and debt service further affected the level of capital expenditure in the period.
“A total of N486.29bn was released by October 17, 2018 for capital projects.
“In effect, a deficit of N1.14 trillion was incurred as at end of August 2018, which is about 58 per cent of the budgeted deficit for the full year.”
Similarly, the document stated that the sum of N1.54 trillion had been released to cover debt service obligations during the eight months period.
It said the N3.64 trillion released during the eight months period excluded the N486.29bn which was released to agencies of government on October 17 for the execution of capital projects.
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