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Setback for economy as FG records N2.3trn budget deficit in Q1

As the economy is gradually recovering from the huge impact of the Covid-19 pandemic, there seems to be a major setback as the Federal Government recorded a budget deficit of about N2. 293 trillion in the first quarter of 2021.

This is contained in the First Quarter (Q1) Budget Implementation Report (BIR) by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed.

According to the report, “The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of ₦2.293 trillion during the quarter (6.43 percent of the 2021 quarterly GDP).

“The first quarter deficit was ₦1.070 trillion (87.51 percent) higher than the projected quarterly fiscal deficit of ₦1.222 trillion. The 2021 fiscal deficit was also higher than the ₦1.377 trillion deficit recorded in the first quarter of 2020. The deficit was partly-financed through domestic borrowing of ₦550.0 billion.”

In the report, the Federal Government total revenue stood at ₦1.091 trillion in the period under review.

This comprises ₦299.33 billion (27.43 percent) oil revenue and ₦792.09 billion (72.57 percent) non-oil revenue.

The amount received was ₦905.19 billion (45.34 percent) below the quarterly budget projection but ₦99.17 billion (9.99 percent) above the ₦992.25 billion reported in the first quarter of 2020

In the area of expenditure side, the government spent the sum of at ₦3.384 trillion, representing ₦502.29 billion (17.43 percent) and ₦1.014 trillion (42.80 percent) above the ₦2.882 trillion quarterly projection and ₦2.370 trillion reported in the corresponding quarter of 2020, respectively.

A breakdown of the expenditure indicated that a total of ₦1.096 trillion was spent on non-debt recurrent expenditure in the first quarter of 2021.

This represents a decrease of ₦313.99 billion (22.26 percent) and ₦50.79 billion (4.43 percent) below the quarterly estimate of ₦1.410 trillion and ₦1.147 trillion recorded in the first quarter of 2020 respectively. Statutory Transfers was ₦124.13 billion during the review period

A total of ₦384.52 billion was released and cash backed in the first quarter of 2021 for the implementation of 2021 capital projects and programmes of MDAs.

In another development, total Debt Service in the first quarter of 2021 stood at ₦813.10 billion, indicating an increase of ₦32.01 billion (4.10 percent) above the ₦781.10 billion projected for the quarter.

The sum of ₦581.27 billion was used for domestic debt servicing, while ₦231.83 billion was used for external debt service during the period under review.

The amount used for domestic debt servicing was ₦35.40 billion (6.48 percent) above the projection for the quarter.

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Ihesiulo Grace

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