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2018 budget records N1.1trn deficit in 8 months

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2018 budget records N1.1trn deficit in 8 months

The Federal Government recorded a fiscal deficit of N1.1 trillion between January and August this year, the Budget Office of the Federation has revealed.

It would be recalled that the 2018 budget had a total spending of N9.1tn made up of N2.87tn for capital expenditure, N3.51tn for recurrent (non-debt) expenditure while N2.01tn was projected to be spent on debt servicing.

The budget was expected to be financed from N2.99tn to be generated from oil revenue, N31.25bn from Nigeria Liquefied Natural Gas dividend while N1.17bn is expected to be realised through revenue from minerals and mining.

The Federal Government also planned to generate N658.55bn from Companies Income Tax; N207.51bn from Value Added Tax; N324.86bn from Customs while N57.87bn was expected to come from federation account levies.

Also government was expected to raise N847.95bn through independent revenue from its agencies, while tax amnesty income, signature bonus and unspent balance from previous years were to provide N87.84bn, N114.3bn and N250bn respectively

Details of the performance of the 2018 budget which was captured in the 2019 Budget Call Circular showed that as of the end of August, the Federal Government’s actual revenue was N2.48tn.

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According to the budget circular signed by the Minister of Budget and National Planning, Senator Udo Udoma, the N2.48tn actual revenue represented about 52 per cent of the N4.78tn pro-rata budget.

This, the circular said, was due to the underperformance of both oil and non-oil revenue sources.

“The shortfall in Companies Income Tax collections may be partly due to seasonal factors as most companies remit their income taxes during the second half of the year.

“The slow recovery in economic activities that drive consumption and the lingering security issues contributed to the underperformance of other non-oil revenue sources like Value Added Tax.

“The delay in the implementation of other revenue initiatives like the restructuring of JV (Joint Venture) oil assets and tighter performance management of Government Owned Enterprises further explain the weak non-oil revenue performance”, the circular said.

In terms of expenditure, it said out of the total appropriation of N9.12trn, the sum of N3.64tn had been spent between January and August.

According to the circular, this represents a shortfall of about N2.44tn over the prorated expenditure sum of N6.08tn for January to August.

A breakdown of the N3.64tn showed that a total amount of N1.83tn had been released for non-debt recurrent expenditure for the payment of salaries, pensions, and overheads among others.

“Releases for capital expenditure only commenced after the 2018 budget was signed into law on June 20, 2018.

“Revenue shortfalls and the need to meet non-discretionary recurrent spending such as payment of salaries and debt service further affected the level of capital expenditure in the period.

“A total of N486.29bn was released by October 17, 2018 for capital projects.

“In effect, a deficit of N1.14tn was incurred as at end of August 2018, which is about 58 per cent of the budgeted deficit for the full year”, the circular concluded.

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