Deficit spending by the Federal Government (FG) rose by 23.7 per cent, YoY, to N7.3 trillion in 2021 from N5.9 trillion recorded in 2020.

The Central Bank of Nigeria, CBN, disclosed this in its fourth quarter 2021 (Q4’21) Statistical Bulletin report.

The 23 per cent rise in FG’s deficit spending was caused by a 17.4 per cent increase in expenditure which subdued the 9.2 per cent increase in revenue.

According to the CBN, FG’s total revenue for 2021 rose to N4.39 trillion in 2021, from N4.02 trillion recorded in 2020, representing a 9.2 per cent rise.

On the other hand, total expenditure rose to N11.69 trillion in 2021, from N9.95 trillion in 2020, representing 17.4 per cent.

In the first quarter, Q1’21, FG recorded N914.8 billion revenue and N2.89 trillion expenditure, resulting in a N1.97 trillion deficit.

In the second quarter, Q2’21, FG recorded N1.14 trillion revenue and N2.69 trillion expenditure, resulting in N1.55 trillion, VANGUARD report.

In the third quarter, Q3’21, the FG recorded N1.11 trillion revenue and N3.19 trillion expenditure, resulting in a N2.09 trillion deficit.

In the fourth quarter, Q4’21, the FG recorded N1.2 trillion revenue and N2.9 trillion expenditure, resulting in a N1.69 trillion deficit.

Providing details on the fiscal activities in Q4’21, the CBN said: “FGN retained revenue declined due to shortfalls in the receipt from federation account sources.

“At N1.26 trillion, provisional retained revenue of the FGN declined by 36.6 per cent and 3.2 per cent, relative to the budget benchmark and the preceding quarter, respectively, reflecting the subsisting revenue challenge over the past two years.”

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On expenditure, the CBN said: “The decline in provisional capital expenditure triggered an 8.8 per cent drop in aggregate spending in the fourth quarter of 2021, relative to the preceding quarter.

“A disaggregated analysis revealed that recurrent expenditure rose by 5.6 per cent, relative to the preceding quarter, while capital expenditure dropped by 61.3 per cent, over the same period. “Recurrent spending maintained its dominance, accounting for 75.1 per cent; while capital expenditure and transfers constituted the balance of 21.3 per cent and 3.6 per cent, respectively.

“Aggregate expenditure fell faster than revenue, thus tapering the provisional deficit. At N2.23 trillion, the provisional fiscal deficit of the FGN was 12.0 per cent lower than the level in the preceding quarter.”