FG’s fiscal deficit hit N3.01tn in April

Nike Popoola

The Federal Government’s fiscal deficit hit N3.01tn as of April, 2024, latest figures obtained from the Central Bank of Nigeria (CBN) has revealed.

According to personal statement of a member of the Monetary Policy Committee (MPC), Mustapha Akinkunmi, which was released by the CBN and obtained by Dailyeconomy, this figure was below the budget projection.

He said, “Crude oil production in Nigeria increased slightly to 1.28mbpd in June 2024 from 1.25mbpd in May 2024, attributed to reduced oil theft and increased output from Qua Iboe and Erha terminals. However, production remains below the OPEC quota of 1.58mbpd.

“Government revenue performance remains below target, with total FGN retained revenue at N2.87 trillion as of April 2024. The fiscal deficit was N3.01 trillion as of April 2024, 0.7 per cent below the budget projection. Nigeria’s debt-GDP ratio increased from 41.5 per cent in Q4 2023 to 51.2 per cent in Q1 2024, with external debt constituting 46.1 per cent of the public debt stock.”

In the statement, he noted that headline inflation in Nigeria rose to 34.19 per cent in June 2024 from 33.95 per cent in May 2024. This increase was mainly driven by food supply deficits caused by a weak naira, which increased neighboring countries’ demand for Nigerian agricultural produce and ongoing insecurity in farming communities.

This is compared with South Africa’s 5.1 per cent, India’s 5.08 per cent, and Russia’s 8.6 per cent inflation rates. Year-on-year food inflation in Nigeria, increased slightly from 40.66 per cent in May 2024 to 40.87 per cent in June 2024.Month-on-month core inflation also rose, due to the rising price index of processed food, driven by security challenges, infrastructure constraints, high farm input costs, and seasonal factors.

He stated that, “The naira depreciated to N1,605.50 on July 19, 2024, from N1,525.00 on June 28, 2024. Gross external reserve stood at US$34.88 billion as of June 2024, projected to be about US$32.93 billion at the end of May 2024. This reserve could cover imports for about 11 months of goods and about 8 months of goods and services.”