Nigeria’s Fiscal Deficit Widens To N931bn In 59-Days
By Patience Ikpeme
Nigeria faced significant fiscal challenges in the first two months of this year, with a total budget deficit of -N931 billion.
The Central Bank of Nigeria’s latest report revealed that the federal government recorded a deficit of -N513 billion in February 2023, which was 19% higher than the deficit of -N418 billion in January 2023 but lower than the -N654 billion deficit in February 2022.
The widening deficits were attributed to a -8% reduction in the federal government’s retained revenue, which fell to N479 billion, well below the budgeted benchmark of N831 billion. Nigeria’s revenue generation has been hampered by a decline in crude oil production, the country’s main source of income, due to ongoing crude oil theft.
To finance its budget, the government heavily relied on borrowing, resulting in a revenue-to-debt servicing ratio of 111% as of March 31, 2023.
In the first quarter of the year, the government generated N5 trillion in revenue but spent N5.6 trillion on debt servicing alone.
The country’s total public debt stock, excluding the Central Bank’s ways & means loans, stood at N49.85 trillion ($108.30 billion) as of March 31, 2023, according to the Debt Management Office.
