Federal Government Records N1.3 Trillion Fiscal Deficit in the Third Quarter of 2020

The Federal Government posted N1.29 trillion fiscal deficit in the third quarter of 2020, according to the latest economic report from the Central Bank of Nigeria (CBN).

The CBN said the federal government revenue rose by 4.5 percent to N2.27 trillion in the third quarter when compared to the preceding quarter. However, it was 22.1 percent below the same quarter of 2019 and 10.7 percent below the stipulated budget benchmark.

In the report released on Sunday, the apex bank said “At N2.27tn, federally collected revenue in the third quarter of 2020 grew by 4.5 percent, over the level in the preceding quarter.

“However, it was below collections recorded in the same quarter of 2019 and the budget benchmark by 22.1 per cent and 10.7 per cent, respectively. Oil receipt accounted for 42.0 percent of the total collection, while non-oil revenue made up the balance of 58.0 per cent.”

The report hinged the deficit on low oil receipts due to the negative impact of COVID-19 on Nigeria’s main source of revenue.

It said, “The retained revenue of the Federal Government of Nigeria, at N842.09bn, fell short of the budget benchmark and the level in the third quarter of 2019 by 42.3 per cent and 35.7 per cent, respectively.

“The provisional FGN expenditure in the period was N2.13tn, representing a shortfall of 21.1 per cent, relative to the budget.

“The decline in expenditure underscores the imperative of prioritising spending amidst persisting revenue challenges. Consequently, the fiscal operations of the FGN resulted in an estimated deficit of N1.29tn.”