By Oyinkansayo Wole-Bodunde.
Nigeria’s Federal Government recorded a significant increase in deficit spending, rising by 28% to N12.1 trillion in the first ten months of 2024, compared to N9.8 trillion in the same period of 2023.
This passed the budgeted deficit target of N9.8 trillion by 31%. This increase happened despite a 36% year-on-year growth in revenue, driven by a 54.5% increase in revenue to the Federation Account.
According to the Central Bank of Nigeria’s Monthly Economic Reports, revenue to the Federation Account increased to N20.214 trillion in the first ten months of 2024, up from N13.079 trillion in the same period of 2023. However, revenue fell by 7.9% month-on-month to N1.988 trillion in October.
The Federal Government’s expenditure also increased. It increased by 17.8% quarter-on-quarter to N6.7 trillion in Q2 2024. In October, expenditure increased by 28.4% month-on-month to N1.83 trillion.
The Central Bank of Nigeria noted that the increase in expenditure was largely because of higher capital spending. The bank said, “The rise in expenditure was attributed, largely, to the higher capital spending which rose by N463.49 billion relative to the preceding month, but was short of the target by 44.03%.”
The bank also stated the need to improve fiscal space through broadening the tax base and diversified revenue streams, saying, “The expansion reflected a higher increase in expenditure relative to revenue, underscoring the need to improve fiscal space through the broadening of the tax base and diversified revenue streams.”
