The recently released CBN half year economic report revealed Nigeria earned a gross income of N5.57trillion Nigeria for the first half of the year. As expected Oil Revenue took the highest share of contribution with 78.1% and non-oil revenue the balance.
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How was is shared?
Of the total federally-collected revenue (gross), the sum of N2,624.68 billion or 47.1 per cent was transferred to the Federation Account; N226.70billion or 4.1 per cent to the FG Independent revenue, N338.64 billion or 6.1 per cent to VAT Pool Account and N131.37 billion or 2.4 per cent to other transfers (including Education Tax Fund, Customs Special Levies and National Information Technology Development Fund). Deductions from oil revenue in respect of the Joint Venture Cash Call, Excess Crude Oil, Excess PPT/Royalty, Domestic Subsidy and others accounted for N2,214.56 billion or 39.7 per cent, while the balance of N41.27 billion or 0.6 per cent was transferred as cost of revenue collection to the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service (NCS).
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How it was shared between various levels of Government
The sum of N2,624.68 billion was distributed to the three tiers of government from the Federation Account in the first half of 2012. The Federal Government received the sum of N1,235.92 billion, while the states and local governments collected N626.87 billion and N483.29 billion, respectively. The balance of N278.60 billion was allocated to the 13% Derivation Fund for distribution among the oil producing States.
Furthermore, the sums of N75.00 billion, N165.62 billion and N462.02 billion were distributed as share of Excess Crude Account, Subsidy Re-Investment and Empowerment Programme (SURE-P)/Exchange Rate Gain/NNPC Refund and revenue augmentation, respectively. This brought the total federation revenue distributed among the three tiers of government including the 13% Derivation Fund to N3,327.33 billion. A breakdown indicated that the Federal Government received N1,537.01 billion (including Special Funds); state governments, N802.04 billion; local governments, N618.34 billion; while the sum of N369.94 billion was allocated as 13% Derivation Fund.
Federal Government Expenditure
According to CBN’s provisional data, “aggregate expenditure of the Federal Government stood at N2,023.80billion or 10.6 per cent of GDP in the first half of 2012. Of the total amount disbursed, recurrent and capital expenditures accounted for 79.5 and 12.8 per cent, respectively, while transfers accounted for the balance of 7.7 per cent. The economic classification of the recurrent expenditure showed that N1,194.31 billion or 6.2 per cent of GDP was expended on goods and services, N314.46 billion or 1.6 per cent of GDP on interest payments, while transfers appropriated N99.67 billion or 0.5 per cent of GDP. The expenditure on social and community services fell by 9.6 per cent to N259.56 billion or 1.4 per cent of GDP as against the N287.08 billion or 1.6 per cent of GDP recorded in the corresponding period of 2011. Similarly, the expenditure on economic services declined by 33.2 per cent to N130.46 billion or 0.7 per cent of GDP, from N195.35 billion or 1.1 per cent of GDP in the first-half of 2011”.
Total Released was N259b out of the N669b budgeted. It was spent as follows;
Economic Services – N97.82b (0.5% of GDP)
Social and Community Services – N39.62b (0.2% of GDP)
Administration – N113.61b (0.6% of GDP)
According to the CBN, “Provisional data on the functional classification of the Federal Government’s capital expenditure in the first-half of 2012 revealed that aggregate capital releases for economic services fell by 17.7 per cent below its level in the first half of 2011 to N97.82 billion or 0.5 per cent of GDP and accounted for 37.7 per cent of the total releases. Social and community services accounted for 15.3 per cent of the total but declined by 27.8 per cent from the level in the corresponding period of 2011 to N39.62 billion or 0.2 per cent of GDP in the first half of 2012. The outlay on administration accounted for 43.8 per cent of the total and decreased by 4.7 per cent to N113.61 billion or 0.6 per cent of GDP. Overall, total capital releases at N259.25 billion was 38.7 per cent of the proportionate budget estimate of N669.99 billion in the first-half of 2012”.
Budget Deficit as a percentage of GDP
CBN “The fiscal operations of the Federal Government in the first half of 2012 resulted in an overall notional deficit of N281.82 billion or 1.5 per cent of GDP as against the proportionate budget deficits of N568.10 billion or 3.0 per cent of GDP and the deficit of N650.23 billion or 3.7 per cent of GDP recorded in the corresponding period of 2011. The deficit was financed from domestic sources, mainly, the FGN Bonds”.