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Nigeria records N485.51bn fiscal deficit in January – CBN report

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A report from the Central Bank of Nigeria has shown that the federal government recorded N485.51bn fiscal deficit in January 2021.

The monthly economic report released by the CBN on Friday showed that the low revenue performance in January was due to the decline in non-oil receipts following the lingering effects of the COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

“Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn,” the report read.

According to the report, the total public debt outstanding of the federal government as of the end of September 2020, stood at N28.03tn, with domestic and external debts accounting for 56.5 per cent and 43.5 per cent, respectively.

The report noted that the continued spread of the COVID–19 pandemic weakened global economic recovery and led to a decline in foreign exchange inflow into the economy in the month under review.

Provisional data showed that aggregate foreign exchange inflow into the economy was $5.47bn, showing decreases of 54.2 per cent and 67.5 per cent below its level in the preceding month and the corresponding month of 2020 respectively.

The CBN attributed this to the respective 66.2 per cent and 45.1 per cent decrease in inflow through the Apex bank and autonomous sources.

Consequently, the foreign exchange outflow through the economy fell by 22.1 per cent and 57.1 per cent to $2.97bn, from the levels of $3.81bn and $6.92bn respectively in the preceding month and the corresponding month of 2020.

This was driven, largely, by the decline in outflow through the CBN.

Foreign exchange transactions through the economy resulted in a net inflow of $2.5bn, compared with $8.1bn and $9.9bn in the preceding month and the corresponding period of 2020 respectively, the report noted.

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