The federal government had a fiscal deficit of N1.14tn in its operations between January and August 2018, according to the Budget Office of the Federation.
President Muhammadu Buhari had signed the 2018 budget of N9.1tn with N2.87tn for capital expenditure, N3.51tn for recurrent (non-debt) expenditure while N2.01tn was for debt servicing.
The budget was to be funded from N2.99tn made from oil revenue, N31.25bn from Nigeria Liquefied Natural Gas dividend and N1.17bn was to be made via minerals and mining.
To fund the budget, the Federal Government had planned to generate N658.55bn from Companies Income Tax; N207.51bn from Value Added Tax; N324.86bn from Customs while N57.87bn was expected to come from federation account levies.
The performance of the budget was revealed in the 2019 Budget Call Circular issued August and showed that the Federal Government’s real revenue was N2.48tn.
“The shortfall in Companies Income Tax collections may be partly due to seasonal factors as most companies remit their income taxes during the second half of the year,” the circular noted.
“The slow recovery in economic activities that drive consumption and the lingering security issues contributed to the underperformance of other non-oil revenue sources like Value Added Tax.
“The delay in the implementation of other revenue initiatives like the restructuring of
“JV (Joint Venture) oil assets and tighter performance management of Government Owned Enterprises further explain the weak non-oil revenue performance.”
It added that “Releases for capital expenditure only commenced after the 2018 budget was signed into law on June 20, 2018.
“Revenue shortfalls and the need to meet non-discretionary recurrent spending such as payment of salaries and debt service further affected the level of capital expenditure in the period.
“A total of N486.29bn was released by October 17, 2018 for capital projects.
“In effect, a deficit of N1.14tn was incurred as at end of August 2018, which is about 58 per cent of the budgeted deficit for the full year.”