The fiscal deficit of the Federal Government increased by 0.1% to N824.79bn in April from N823.91bn in March, as revealed in the Central Bank of Nigeria’s April 2024 Monthly Economic Report.
A fiscal deficit occurs when a government’s expenses exceed its revenues.
According to the CBN report released recently, the deficit exceeded the budgeted N764.19bn for the period by 7.92%.
In addition, consumer credit outstanding dropped by 53.83% to N3.8tn by the end of April 2024 compared to the previous month.
The rise in deficit was mainly due to a 0.55% decrease in retained revenue to N419.91bn in April from N422.23bn in March, according to the CBN. This decline was driven by lower exchange gains.
The report stated, “The fiscal activities of the Federal Government of Nigeria in April resulted in an expansion in the fiscal deficit.
“Preliminary data indicated that both primary and overall deficits increased to N260.98bn and N824.79bn, respectively, from N249.43bn and N823.91bn in the previous month, reflecting the sharper decline in retained revenue.
“Likewise, the central bank observed a 0.16% month-on-month decrease in government expenditure to N1.246tn in April from N1.244tn in March, primarily due to reduced capital spending.
“The provisional figures showed that government expenditure reduced as a result of lower capital spending.
“Expenditure was 0.12% lower than the previous month at N1,244.71 billion and significantly below the projected spending of N2,398.12 billion.
“The decrease was largely attributed to the cutback in capital outlay during the review period, with recurrent and capital expenditures accounting for 84.5% and 6.30%, respectively, while transfer payments made up the remaining 9.2%.”
On the other hand, customer credit outstanding decreased significantly by 53.83% to N3.8tn due to diminished customer interest in loans caused by high interest rates.
This decline was mainly driven by a 60.79% decrease in personal loans to N2.95tn, while retail loans saw an 18.81% increase to N856.77bn.
“An analysis showed that personal loans represented 77.48% of the total consumer credit, with retail loans making up the remaining portion,” according to the CBN.