The fiscal operations of the Federal Government in the fourth quarter of 2019, showed an estimated deficit of N1.14 trillion, compared with the proportionate quarterly budget deficit of N479.62 billion. The government had estimated an expenditure profile of N2.59 trillion for the fourth quarter of 2019, but expended N2.07 trillion, representing a 20.1 percent shortfall and 14.1 percent compared with the level in the preceding quarter.
But the provisional data from Q4 Economic Report by the Central Bank of Nigeria (CBN) revealed that while the Federal Government N2.07 trillion in the period under review, its earnings amounted to N938.72 billion. The development, which resulted to N1.14 trillion deficit financing, was below both the quarterly budget estimate, as well as the receipt in the preceding quarter by 55.6 percent and 46.0 percent, respectively.
Of the N938.72 billion, Federation Account accounted for 83.8 per, cent, while Federal Government Independent Revenue, Value Added Tax (VAT), Exchange Gain and Non-oil Excess, accounted for 8.7 percent, 4.4 percent, 2.7 percent, and 0.4 percent, respectively. Still, a further breakdown of the total expenditure showed that the recurrent component accounted for 73 percent, while capital and statutory transfers accounted for 21.3 percent and 5.7 percent, repectively.
An analysis the recurrent expenditure components showed that the non-debt component like salaries and others, accounted for 74.1 per cent, while debt service payments was 25.9 percent. The Federal Government and the sub-nationals (states) got tangled with the deficits when the federally-collected revenue in Q4 of 2019 settled at N2.6 trillion, which was lower than the quarterly budget of N3.76 trillion by 30.8 percent.
It also fell by 10.6 percent when compared with the receipt in the preceding quarter. The decline in federally-collected revenue (gross) relative to the quarterly budget, was attributed to shortfalls in both oil and non-oil revenues.Gross oil revenue, at N1.56 trillion or 60.1 percent of the total receipts, was below the quarterly budget by 35.3 percent, but above the receipt in the preceding quarter by 16.7 percent.
The decline in oil revenue relative to the quarterly budget was due to shortfalls in all its components, except domestic crude oil and gas sales.Non-oil revenue (gross) at N1.04 trillion fell below the quarterly budget of N1.34 trillion by 22.6 percent, as well as below the level in the preceding quarter by 33.9 percent.
The drop in non-oil revenue relative to the quarterly budget was due to the decline in receipt from all its components, except customs and excise duties. After the statutory deductions and transfers of N517.67 billion and N450.46 billion, respectively, a net sum of N1.63 trillion was retained in the Federation Account for distribution during the quarter.
Of this amount, the Federal Government received N786.35 billion; state and local governments received N398.85 billion and N307.49 billion, respectively, while the balance of N141.47 billion was transferred to the 13 percent Derivation Fund for distribution among the oil-producing states.
Additionally, the Federal Government received N41.46 billion, while the state and local governments received N138.22 billion and N96.75 billion, respectively, from the VAT Pool Account. Also, the sum of N8.7 billion was drawn-down from the Non-oil Excess Account and distributed among the Federal Government, N3.99 billion; state governments, N2.02 billion; local governments, N1.56 billion; and 13 percent Derivation Fund, N1.13 billion.
Similarly, N55.85 billion was shared as Exchange Gain, with the Federal Government getting N25.62 billion; state governments, N12.99 billion; local governments, N10.02 billion; and 13 percent Derivation Fund, N7.22 billion. Thus, the total statutory and VAT revenue allocation to the three tiers of government in the fourth quarter of 2019, amounted to N1.98 trillion, against the quarterly budget of N3.27 trillion.
At N701.90 billion, the total allocation to state governments from the Federation Account, including the 13 percent Derivation Fund and VAT Pool Account, was lower than the quarterly budget by 40.4 percent. A breakdown of the revenue flows to the states showed that receipts from the Federation Account was N563.69 billion (80.3 percent), while the share from VAT stood at N138.22 billion (19.7 percent).
The receipts from the Federation and VAT Pool accounts fell below the quarterly budget estimate by 42.1 percent and 32.5 percent, respectively.On the other hand, total allocations to local governments from the Federation and VAT Pool accounts in the fourth quarter of 2019 stood at N415.82 billion and were also, below the quarterly budget by 38.3 percent.
Of the total amount, allocation from the Federation Account was N319.07 billion, representing 76.7 percent of the total receipts, while the VAT Pool Account stood at N96.75 billion, representing 23.3 percent.
