FG’s fiscal deficit down to N3.1trn in Q4 2024
Agency Report
The Central Bank of Nigeria (CBN) ‘s most recent quarterly economic report shows that the federal government of Nigeria’s (FGN) fiscal operations resulted in a fiscal deficit of -N3.20 trillion in the fourth quarter of 2024.
The outturn reflects an improvement from the -N3.20 trillion and -N3.43 trillion deficits recorded in the third quarter of 2024 and fourth quarter of 2023, respectively.
FBNQuest Research said the modest decline was supported by higher gross revenue collection, especially oil receipts, aided by improved crude production and a weaker naira exchange rate. Despite the positive outturn, the fiscal deficit remained elevated, reflecting the shortfall in budgeted oil revenue and persistent spending pressures.
“The data is provisional and may differ materially from the data from the Budget Office’s quarterly reports, which are often delayed”, it said.
Oil revenue into the federation account increased to N2.0 trillion in the fourth quarter, supported by strong oil production, improved pipeline security, and exchange rate depreciation to N1,623 from N1,589 in the third quarter.
Non-oil revenue benefited from a rise in receipts from the electronic money transfer levy to N794 billion, from N7 billion and N37 billion in the third quarter of 2024 and fourth quarter of 2023, respectively.
The FGN’s independent revenue maintained its strong momentum from the third quarter of 2024 and exceeding the N561 billion recorded in the third quarter of 2024.
Consequently, the FGN’s retained revenue advanced 10 per cent quarter-on-quarter (QoQ) and 57 per cent year-on-year (YoY) to N2.5 trillion, though it was still 49 per cent below the quarterly pro-rata budget target of N4.9 trillion.
The persistent revenue shortfall highlights the FGN’s aggressive revenue assumptions, with gross oil revenue falling short of the N5.3 trillion quarterly budget by over 60 per cent.
Total expenditure rose marginally to N5.6 trillion, driven by higher personnel costs and debt service, which increased 16 per e and seven per cent QoQ, respectively.
Of the total expenditure, recurrent spending accounted for 75 per cent, while capital expenditure and transfers constituted 17 per cent and eight per cent, respectively.
The total debt service of N2.2 trillion during the quarter translates to a debt service-to-revenue ratio of 87.3 per cent.
The FGN’s fiscal operations for the fourth quarter imply FY 2024 revenue and expenditure of N8.7 trillion and N23.1 trillion, respectively, resulting in a fiscal deficit of N14.4 trillion, equivalent to 5.4 per cent of 2024 GDP, above the 3.0 per cent threshold set in the Fiscal Responsibility Act
