Nigeria’s Deficit Spending Soars 28% To N12.1 Trillion, FG Faces Financial Strain

The Federal Government’s deficit spending increased by 28% year-on-year (YoY), reaching N12.1 trillion in the first ten months of 2024, up from N9.8 trillion in the same period of 2023.....KINDLY READ THE FULL STORY HERE▶

As a result, the government surpassed its 2024 budget deficit target of N9.8 trillion by 31%.

This rise in deficit spending occurred despite a 36% YoY growth in the Federal Government’s revenue during the period.

The surge in revenue was primarily driven by a 54.5% YoY increase in revenue to the Federation Account during the 10-month period.

According to an analysis of data from the Central Bank of Nigeria (CBN) Monthly Economic Reports, revenue to the Federation Account grew to N20.214 trillion in the first ten months of 2024, up from N13.079 trillion in the same period in 2023.

From N4.973 trillion in the first quarter of 2024, revenue to the Federation Account increased quarter-on-quarter (QoQ) to N6.388 trillion in the second quarter, and further rose by 7.5% QoQ to N6.865 trillion in the third quarter. However, in October 2024, revenue fell by 7.9% month-on-month (MoM) to N1.988 trillion.

Analysis of the FG’s fiscal activities revealed that in Q1 2024, deficit spending amounted to N4.18 trillion, which grew by 1.9% QoQ to N4.26 trillion in Q2. In Q3 2024, deficit spending decreased by 23% to N3.3 trillion, and in October, it stood at N361.89 billion.

The report also indicated that the FG saw a 36.6% YoY growth in revenue, reaching N6.86 trillion in the first ten months of 2024, up from N5.02 trillion in the same period of 2023. QoQ, revenue grew by 71% to N2.4 trillion in Q2 from N1.4 trillion in Q1. In Q3, however, revenue fell by 4.2% QoQ to N2.3 trillion, with October 2024 revenue standing at N763.79 billion.

Expenditure also grew, rising by 17.8% QoQ to N6.7 trillion in Q2 2024 from N5.6 trillion in Q1, but dropped by 16.4% QoQ to N5.6 trillion in Q3 2024.