Revealed: How FG recorded N910bn Fiscal Deficit in Three Months

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Godwin Emefiele
Godwin Emefiele

The federal government records N910 billion deficit in three months due to the shortfall in receipts from both oil and non-oil revenue in the fourth quarter of 2018

By Anayo Ezugwu

THE Central Bank of Nigeria, CBN, has revealed that the federal government recorded a fiscal deficit of N910.41 billion in the fourth quarter of 2018. The CBN said federally-collected revenue, at N2.41 trillion, was 27.4 percent and 4.8 percent lower than the estimate and the receipts in the preceding quarter, respectively.

The apex bank in its fourth quarter 2018 economic report said the deficit was due to the shortfall in receipts from both oil and non-oil revenue in the reviewed quarter. The federal government estimated retained revenue and total expenditures were N916.44 billion and N1.826 trillion, respectively, resulting in an estimated deficit of N910.41 billion in the fourth quarter of 2018.

According to the report, the cessation of rainfall in the period led to widespread dryness across the country. Agricultural activities in the fourth quarter were dominated by harvesting of tubers, grains and vegetables. “In the livestock sub-sector, farmers continued with the breeding of poultry birds and fattening of cattle in anticipation of the end of year sales,” the CBN said.

The end-period headline inflation on year-on-year and 12-month moving average bases for the review period were 11.44 percent and 12.10 percent, respectively. The apex bank maintained a non-expansionary monetary policy stance in the fourth quarter of 2018, aimed at further curbing inflationary pressure.

Broad money supply (M3), on a quarter-on-quarter basis, grew by 8.3 percent to N33.42 trillion at end-December 2018, compared with the growth of 5.1 percent at end-September 2018. The development reflected, wholly, the 4.5 percent increase in domestic credit (net) of the banking system.

Over the level at end December 2017, broad money supply, (M3), grew by 16.6 percent, compared with the 7.6 percent and 0.6 percent growth recorded at the end of the preceding quarter of 2018 and the corresponding quarter of 2017, respectively. The growth in M3 was due to the 6.4 percent and 18.5 percent increase in domestic credit (net) and foreign assets (net) of the banking system, respectively.

On a quarter-on-quarter basis, narrow money supply (M1), rose by 9.2 percent, compared with 0.5 percent and 11.0 percent at the end of the preceding quarter. The development was due to the 19.4 percent and 7.5 percent increase in its currency outside banks and demand deposit components, respectively.

Developments in banks’ deposit rates were mixed, while lending rates trended downwards in the review quarter. With the exception of the one-month and three-month deposit rates which fell by 0.26 and 0.04 percentage point to 8.79 percent and 9.43 percent, respectively, all other deposit rates of various maturities rose from a range of 3.68 – 10.10 percent to 3.86 – 10.52 percent at end-December 2018.

The average savings rate remained unchanged at 4.07 percent, same as at the end of the third quarter of 2018, while the average term deposit rate rose by 0.12 percentage points to 8.63 percent at end of the review quarter. The average prime and maximum lending rates declined by 0.09 percentage point and 0.18 percentage point to 16.60 percent and 30.75 percent, respectively.

– Feb. 8, 2019 @ 12:42 GMT |

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