Why Nigeria relied on internal borrowing to source N1.12trn deficit in 2016 budget – CBN

Nigeria’s N1.12 trillion deficit in the 2016 budget, supposed to be largely financed through international credit agencies, including IMF, World Bank and African Development Bank (AfDB), was not to be, which eventually saw the country relying on internal borrowing through sale of financial instruments.

Also, the Federal Government recorded a fiscal deficit of N3.21 trillion in its operations in 2016, due to recession.

This is according to figures obtained from the Financial Stability Report, of the Central Bank of Nigeria (CBN) released in Abuja on Thursday.

Said the report, fiscal deficit for the second half of 2016, was N1.47 trillion, which became lower from the N1.75 trillion, recorded in the first half of the year under reference.

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It was further gathered that the government attempts at finding solution to high over head cost yielded no result as second half of 2016 was fraught with recession-related challenges, which was said to have diverted all attention on how to solve the problem of poor dollar-inflow into the system.

The CBN’s report stated that the 2016 financial balance sheet reflected the Federation Account as having N1.26 trillion (49.4 per cent); the Value Added Tax , N90.7 billion (3.5 per cent) ; while the Independent Revenue was put at N267.8 billion (10.5 per cent).

On the sharing of the account, the Federal Government received from the Excess Crude Account, a total of N141.4 billion (5.5 per cent); from the forex market , it got N316.4 billion (12.4 per cent); while from other major sources, including the Nigerian National Petroleum Corporation ‘s (NNPC’s) refunds, accounted for N479.3 billion (18.7 per cent).

 

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