The fiscal operations of the Federal Government for the second quarter of 2016 has led to a deficit of about N1.09 trillion, which is 96% higher than the N555.49 billion allowed. This was announced in the Central Bank of Nigeria (CBN) Economic Report for the second quarter released on Monday.
The major reason for the deficit was the sharp rise in FG expenditure to the tune of N1.76 trillion, which surpassed the provisional quarterly budget estimate by 12.8, representing a 58.1% increase of the Q1 expenditure.
This was coupled by a 33% shortfall in expected revenue as the Federal Government retained revenue for the second quarter of 2016 was N677.88 billion. Of this sum, NNPC Refund accounted for 4.1% while VAT accounted for 14.9%. The major source of revenue for the FG was the Federation Account, which was responsible for 47.7% of the total revenue.
A breakdown of the expenditure as reported by The Nation showed that 72.6% went to recurrent expenses while the remaining 27.4% was shared by capital expenses (19.8%) and statutory (7.6%). Non-debt part was 73.4% of the recurrent expenses, while debt servicing payment accounted for the remaining 26.6%.
The report went on to show that the inflation rate at the end of Q2 2016 stood at 16.4%, which is higher than the 12.8% recorded at the end of Q1 2016.
Parts of this article originally appeared in The Nation.
