FG deficit spending hits N12.1t – CBN

This marks a significant rise from the N9.8 trillion recorded during the same period in 2023, exceeding the government’s 2024 budget deficit target by 31%.

Despite a 36% year-on-year increase in revenue, deficit spending grew, reaching N4.18 trillion in Q1 2024 and rising slightly by 1.9% quarter-on-quarter to N4.26 trillion in Q2 2024. However, Q3 2024 saw a 23% decline in deficit spending to N3.3 trillion, with October 2024 recording N361.89 billion.

The rise in revenue, driven by a 54.5% year-on-year increase to the Federation Account, saw collections rise from N13.08 trillion in the first ten months of 2023 to N20.21 trillion in the same period of 2024.

Quarterly, revenue increased from N4.97 trillion in Q1 2024 to N6.39 trillion in Q2 2024 and N6.87 trillion in Q3 2024. However, revenue fell month-on-month by 7.9% in October to N1.99 trillion.

Expenditure patterns revealed a 17.8% quarter-on-quarter increase to N6.7 trillion in Q2 2024, followed by a 16.4% drop to N5.6 trillion in Q3.

In October, expenditure rose month-on-month by 28.4% to N1.83 trillion, attributed to higher capital spending.

The October CBN Economic Report highlights a net distribution of N1.3 trillion from federally collected revenue, allocated to federal, state, and local governments, alongside oil-producing states through the 13% derivation fund.

Federal retained revenue rose to N763.79 billion, reflecting a 6.07% increase from September but falling short of the target by 53.23%.

The fiscal balance widened in October, with both primary and overall deficits increasing, driven by higher expenditure relative to revenue.

The report emphasized the need for fiscal reforms, including tax base expansion and diversified revenue streams, to enhance fiscal sustainability.