The Federal Government’s deficit spending increased by 28% year-on-year, reaching N12.1 trillion in the first ten months of 2024, compared to N9.8 trillion in the same period of 2023. According to data from the Central Bank of Nigeria’s (CBN) Monthly Economic Reports, this figure exceeded the 2024 budget deficit target of N9.8 trillion by 31%.
Despite a 36% year-on-year rise in Federal Government revenue during this period, the deficit continued to grow. In the first quarter of 2024, deficit spending stood at N4.18 trillion, rising by 1.9% quarter-on-quarter (QoQ) to N4.26 trillion. However, by the third quarter of 2024, deficit spending decreased by 23% to N3.3 trillion, with October 2024 showing a further reduction to N361.89 billion.
The revenue boost was primarily driven by a 54.5% year-on-year increase in revenue to the Federation Account, which grew to N20.214 trillion in the first ten months of 2024, up from N13.079 trillion in the same period of 2023. Revenue to the Federation Account rose from N4.973 trillion in Q1’24 to N6.388 trillion in Q2’24, continuing to increase by 7.5% QoQ to N6.865 trillion in Q3’24. However, in October, monthly revenue fell by 7.9% to N1.988 trillion.
Federal Government revenue for the 10-month period grew by 36.6% year-on-year, reaching N6.86 trillion, up from N5.02 trillion in 2023. Quarter-on-quarter, revenue jumped by 71% to N2.4 trillion in Q2’24, but dropped by 4.2% in Q3’24 to N2.3 trillion. October’s revenue amounted to N763.79 billion.
Expenditure saw a 17.8% QoQ increase to N6.7 trillion in Q2’24, compared to N5.6 trillion in Q1’24, but fell by 16.4% QoQ to N5.6 trillion in Q3’24. In October, expenditure rose by 28.4% MoM to N1.83 trillion, up from N1.43 trillion in September.
The CBN’s October Economic Report revealed that from the Federation’s collected revenue of N1,988.47 billion, a net balance of N1,298.87 billion was distributed across the three tiers of government. The federal government received N424.87 billion, while state and local governments received N450.96 billion and N332.63 billion, respectively. The remaining N90.42 billion was allocated to the 13% Derivation Fund for oil-producing states. The total disbursement was 7.90% higher than the previous month but fell 43.76% short of the target.
In October, provisional aggregate expenditure stood at N1.83 trillion, 28.43% above the previous month, though still 23.6% below the target of N2.4 trillion. This rise in expenditure was largely due to increased capital spending, which grew by N463.49 billion compared to the previous month, but still fell short of the target by 44.03%.
Provisional FGN retained revenue in October amounted to N763.79 billion, a 6.07% increase from the previous month, though it was 53.23% below the target. As a result, the overall fiscal deficit expanded in October, with both the primary and overall deficits widening by N362.85 billion and N361.89 billion, respectively. This increase was attributed to a higher rise in expenditure relative to revenue, highlighting the need to improve fiscal stability by expanding the tax base and diversifying revenue sources.
