Nigeria’s Budget Deficit Hits N4Trillion Amid Revenue Shortfalls

Data released by the Central Bank of Nigeria in its quarterly economic report has shown that Nigeria’s budget deficit jumped to N4 trillion in the second quarter of the year.

The data revealed that the retained revenue stood at N2.3 trillion for the federal government; however, N6.83 trillion was spent within the same period.

This means that the government’s expenditure fell short by N4.5 trillion.

The federal government’s revenue breakdown reveals its independent revenue stands at N1.2 trillion, while the Value Added Tax (VAT) pool account has N216.2 billion. Additionally, exchange gain has contributed N571 billion to the government’s coffers.

These numbers come at a time when concerns are being raised about the government’s reliance on loans due to poor revenue postings. In fact, the government has been exploring alternative revenue streams, including a proposed windfall tax on Nigerian banks’ foreign exchange gains.

This tax, which has been passed by the Senate, aims to collect N614.9 billion from nine Nigerian banks. The banks in question, including Guaranty Trust Holding Company and Zenith Bank, reported significant foreign currency revaluation gains last year.

Nigeria has also spent huge amounts on debt servicing as a result of heavy reliance on loans to service the shortage of revenue.

There have also been concerns over prudence in the management of government finances amid poor revenue.

SaharaReporters reported how Tinubu’s wife spent N700 million on foreign trips to five countries – US, UK, France, Ethiopia and Mozambique.

The newspaper has also previously reported how Tinubu spent N1.5 billion on foreign trips in one day.

SaharaReporters also noted how the Tinubu-led administration spent N10.5 billion on the renovation of state house offices in seven months.

Although the government has continued to promise prudence in the management of resources, developments question public officials’ commitment to doing this.