The Central Bank of Nigeria (CBN) on Tuesday described as erroneous reports in the media that the federal government overspent the budget by N365.35 billion during the second half of 2014.
A statement signed by the Director, Corporate Communications, CBN, Ibrahim Mu’azu, explained that the Financial Stability Report from which the “misleading conclusion” was drawn clearly states “…the fiscal operations of the federal government resulted in an overall deficit of N365.35 billion or 0.8 per cent of GDP, as against the proportionate budget deficit of N482.10 billion for the second half of 2014. The deficit was financed mostly from privatisation proceeds”.
Thus, the central bank clarified that the report meant that the federal government had initially projected to run a budget deficit of N482.10 billion during the second half of 2014.
“However, the actual outcome turned out to be much less than projected at N365.35 billion. The difference of over N116 billion indicates some prudence, rather than profligacy, in fiscal management.
“The central bank will also like to note that deficit financing of budgets, which is within the Fiscal Responsibility Act, is a widely accepted fiscal practice.”