…Aggregate expenditure contracted slightly by 0.1% m/m to N1.24 trillion (March: N1.25 trillion) due to weaker capital spending (-23.5% y/y).
…Overall fiscal deficit (N824.79 billion vs pro-rated budget: N764.91 billion) rose by 0.1% m/m compared to March (N823.91 billion), reflecting the sharper decline in retained revenue.
SAT AUG 24 2024-theGBJournal| The FGN’s retained revenue declined by 0.6% m/m to N419.91 billion in April (March: N422.23 billion), primarily driven by lower receipt from the foreign exchange gain (-52.3% m/m) despite the significant 1,720.1% m/m increase in inflows from the federation account, according to latest Central Bank of Nigeria’s (CBN) monthly economic report.
On the other hand, aggregate expenditure contracted slightly by 0.1% m/m to N1.24 trillion (March: N1.25 trillion) due to weaker capital spending (-23.5% y/y).
Consequently, the overall fiscal deficit (N824.79 billion vs pro-rated budget: N764.91 billion) rose by 0.1% m/m compared to March (N823.91 billion), reflecting the sharper decline in retained revenue.
We anticipate an underwhelming FGN’s retained revenue in 2024E, given the expected significant shortfall in oil revenue.
At the same time, we expect the government to meet its expenditure targets in line with historical precedence amid increased spending on vulnerable groups.
Overall, our baseline expectation is that the fiscal deficit will print N13.16 trillion (including GOEs and project-tied loans) in 2024E (2023E: N9.56 trillion).
In addition, we think the FG’s introduction of a supplementary budget of N6.20 trillion will cause the fiscal deficit to scale up to N19.81 trillion (or 7.5% of GDP) in 2024E.
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