Government records N1.90tr deficit financing in second quarter

Figure almost 100 per cent above budgetary estimates

An estimated deficit of N1,090.96 billion was recorded in the fiscal operations of the Federal Government at the end of the second quarter of this year.

According to the Central Bank of Nigeria (CBN), in its Second Quarter (Q2) Economic Report, the deficit indicates an increase of 96.4 per cent above the provisional quarterly budget deficit of N555.49 billion.

The report just released and obtained by The Guardian yesterday said provisional data indicated that federally-collected revenue during the second quarter of 2016 was N1,159.05 billion which represents 51.3 per cent, and is 8.6 per cent lower than the quarterly budget estimate and receipts in the preceding quarter, respectively.

The CBN said: “The decline in federally-collected revenue (gross) relative to the budget estimate was attributable to the shortfall in receipts from both oil and non-oil revenue, during the reviewed quarter.”

It further reviewed that at N537.19 billion or 46.3 per cent of the total revenue, gross oil receipt was lower than the provisional quarterly budget and the receipts in the preceding quarter by 39.2 per cent and 19.4 per cent, respectively. It also said the decline in oil revenue relative to the budget estimate was caused by the persistent fall in receipts from crude oil and gas occasioned by low price of crude oil in the international market and the series of production shut- ins and shut-downs. .

The report indicated that though at N621.86 billion or 53.7 per cent of total revenue, gross non- oil receipts was above the receipts in the preceding quarter by 3.2 per cent, it was, below the provisional budget estimate by 58.4 per cent. The decline in non-oil revenue relative to the provisional budget estimate was due, largely, to the shortfall in receipts from all of its components except Customs Special Levies (Non-Federation Account) during the quarter under review.

CBN also gave insights into the distribution of the generated revenue within the quarter: “Of the gross federally-collected revenue, a net sum of N665.67 billion was transferred to the Federation Account for distribution among the three tiers of government and the 13.0% Derivation Fund. The sums of N100.92 billion, N186.83 billion and N48.09 billion were transferred to the Federal Government Independent Revenue, VAT Pool Account and others. The Federal Government received N323.16 billion, while the state and local governments received N163.91 billion and N126.37 billion. The balance of N52.23 billion was allocated to the 13.0% Derivation Fund for distribution among the oil-producing states. The Federal Government also received N28.02 billion from the VAT Pool Account, while the state and local governments received N93.41 billion and N65.39 billion.

“ The sum of N7.86 billion was equally distributed as Exchange Gain among the three tiers of government and the 13% Derivation Fund as follows: Federal Government (N3.68 billion), state governments (N1.87 billion), local governments (N1.44 billion) and 13% Derivation Fund (N0.88 billion). In addition, the sum of N18.99 billion was received by the Federal Government being installmental refund of NNPC‟s indebtedness to the Federal Government in the first quarter of 2016.

“The total statutory and VAT revenue allocation to the three tiers of government in the second quarter of 2016 amounted to N879.35 billion, compared with the provisional quarterly budget estimate of N1,485.70 billion and N1,074.31 billion received in the first quarter of 2016.”