The Federal Government’s deficit spending increased by 28 percent year on year to N12.1 trillion in the first 10 months of 2024, up from N9.8 trillion in the same time in 2023. Thus, in the first 10 months, the Federal Government exceeded its Budget 2024 deficit target of N9.8 trillion by 31%. The increase in deficit spending occurred despite a 36 percent YoY increase in FG revenue throughout the time.
The increase in FG revenue was driven by a 54.5 percent YoY increase in revenue to the Federation Account throughout the 10-month period. According to data from the Central Bank of Nigeria’s (CBN) Monthly Economic Reports, revenue to the Federation Account increased to N20.214 trillion in the first ten months of 2024, from N13.079 trillion in the same time in 2023, 10m’23.
Revenue to the Federation Account increased from N4.973 trillion in the first quarter (Q1’24) to N6.388 trillion in the second quarter (Q2’24). It increased by 7.5% QoQ to N6.865 trillion in Q3’24.However, revenue to the FederationAccount decreased 7.9 percent month on month in October, to N1.988 trillion.
According to an analysis of the FG’s fiscal actions, deficit spending in the first quarter of 2024 (Q1’24) was N4.18 trillion and increased by 1.9 percent quarter on quarter (QoQ) to N4.26 trillion in Q1’24. In Q3 ’24, deficit spending reduced by 23% to N3.3 trillion. In October 2024, deficit spending totalled N361.89 billion. According to the report, the FG’s revenue increased by 36.6 percent year on year to N6.86 trillion in 10m’24, up from N5.02 trillion in the previous year.
QoQ revenue increased by 71% to N2.4 trillion in Q2’24, from N1.4 trillion in Q1’24. In Q3’24, revenue declined by 4.2 percent quarter on quarter to N2.3 trillion. In October 2024, revenue totalled N763.79 billion. The survey also revealed that expenditure increased by 17.8 percent QoQ to N6.7 trillion in Q2’24 from N5.6 trillion in Q1’24. In Q3’24, expenditure fell by 16.4 percent QoQ to N5.6 trillion.
In October, spending increased by 28.4 percent month on month to N1.83 trillion from N1.43 trillion in September. In its October Economic Report, the apex bank stated that “from the federally collected revenue of N1, 988.47 billion, a net balance of N1,298.87 billion was distributed to the three tiers of government after accounting for additional revenue and statutory deductions and transfers.”
The federal, state, and municipal governments received N424.87 billion, N450.96 billion, and N332.63 billion, respectively, with the remaining N90.42 billion allotted to the 13% Derivation Fund for oil-producing states. Net disbursement was 7.90% higher than the previous month, but 43.76% below than the target.
“Provisional aggregate expenditure in October 2024 was N1.83 billion, 28.43% higher than in the previous month but 23.6% lower than the target of N2.4 trillion.” “The increase in expenditure was mostly due to higher capital investment, which increased by N463.49 billion over the previous month but fell short of the objective by 44.03 percent.
In October 2024, the FGN’s retained revenue increased by 6.07 percent to N763.79 billion, but fell 53.23 percent short of the target. The primary and overall deficits increased by N362.85 billion and N361.89 billion, respectively, according to provisional data.
