The CBN’s most recent Quarterly Statistical Bulletin (QSB) for second quarter 1 shows that the fiscal operations of the Federal Government of Nigeria (FGN) resulted in a fiscal deficit of N1.9 trillion, an improvement over the N2.5 trillion recorded in the first quarter. Relative to Gross Domestic Product (GDP), the deficit narrowed to 4.7 per cent of GDP, compared with 6.2 per cent in first quarter of 2021. Although the deficit improved in second quarter, it is still slightly higher than the 4.5 per cent target set in the financial year 2021 budget. The data is sourced by the CBN from the Office of the Accountant-General of the Federation. It is provisional and could be revised in the future. Also, there are usually variances between the CBN’s data series and data from the Budget Office of the Federation.
The quarter-on-quarter (q/q) improvement can be explained by a combination of the higher revenue outturn and lower expenditure. In second quarter, the FGN’s retained revenue was up 23 per cent q/q to N1.1 trillion and was the highest revenue outturn since fourth quarter of 2019.
“We believe the stronger revenue performance reflects better performance of the non-oil sector (which grew by 6.7 per cent in second quarter), particularly higher collections from companies income tax (CIT), VAT, and the FGN’s independent revenue. According to NBS data, total CIT collections were up by 20 per cent q/q to N472 billion in second quarter of 2021”, said analysts at Proshare.
