Politics

Federal Government Faces N13.50 Trillion Deficit in 2023, Reports AGF

Published by Tope Fakinlede on August 27th, 2024.

Federal Government Faces N13.50 Trillion Deficit in 2023, Reports AGF

President Bola Tinubu

The Federal Government of Nigeria reported a substantial fiscal deficit of N13.50 trillion for 2023, according to the latest Fiscal Accounts Report from the Accountant General of the Federation (AGF). This deficit represents 225% of the total revenue for the year.

In 2023, the government earned a total revenue of N5.99 trillion, while expenditures reached N19.50 trillion. This spending includes significant allocations towards debt servicing, which surpassed the revenue collected.

The revenue breakdown reveals that N3.80 trillion came from the Federation Account Allocation Committee (FAAC), while independent revenue contributed N1.98 trillion. Additional revenue sources included N2.39 trillion from the Federation Account, N715.75 billion from exchange rate adjustments, and N441.87 billion from Value Added Tax (VAT).

Non-debt spending accounted for 27.8% of the total expenditure, amounting to N5.42 trillion, with capital expenditure at 23%, totaling N4.49 trillion. The remaining budget was heavily weighted towards debt servicing, which contributed to the severe deficit.

BudgIT, a civic tech organization focused on enhancing citizen engagement with technology, highlighted the fiscal irresponsibility demonstrated by the government, noting that expenditures far exceeded revenues.

Supporting this concern, analysts at FBN Quest pointed out that recent data from the Central Bank of Nigeria (CBN) revealed a fiscal deficit of N824.8 billion for April 2024. This figure, though slightly higher than March 2024’s deficit of N823.9 billion, is an improvement compared to the N1.1 trillion deficit recorded a year earlier. The increase in deficit for April was attributed to a reduction in retained revenue compared to the previous month.