Nigeria’s fiscal deficit hits N7.34trn in 2022

Oluwanifemi Ojo
Oluwanifemi Ojo
Central Bank of Nigeria

The Central Bank of Nigeria in its figure recorded a fiscal deficit of N7.34 trillion between January 2022 and November 2022.

The Punch reported that the CBN disclosed this in the statement presented by a Monetary Policy Committee member, Mike Obadan, at the last MPC meeting in January.

Meanwhile, fiscal deficit occurs when government revenue is less than its expenditures. That is, it spends more than its income.

Obadan, speaking on the fiscal operations of the government said, “These have continued to elicit serious concerns considering the growing yearly fiscal deficits and their implications for public debt accumulation (N44.06tn as of September 2022 and excluding nearly N23.0tn Ways and Means Advances) and inflation in view of the Ways and Means Advances financing.”

He said that this fiscal deficit recorded in 2022 is projected to rise in 2023 causing a challenge for inflation control.

According to him, “From January to November 2022, the Federal Government incurred a fiscal deficit of N7.34tn. The projected Federal Government fiscal deficit for 2023 is N11.34tn and it is to be partially financed through deficit financing. This is where the challenge lies for inflation control.”

According to him, the Nigerian economy faced severe difficulties in 2022 as evidenced by the country’s weakening growth performance, high and rising inflation, pressure on the foreign exchange market and a weakening currency, soaring fiscal deficits and public debt, expanding money supply, and other factors.

In his words, “Macroeconomic performance in the country had continued to be impacted by spillovers from the major economies: geopolitical tensions, supply chain disruptions, high inflation, high energy and food prices, tightening financial conditions, among others.”

MPC says the fiscal sector problems may persist till 2023 owing to rising debt levels.

According to another MPC member, Robert Asogwa, “The fiscal sector challenges persist and may even worsen in 2023 with rising debt levels and expected deficit position. In 2022, the huge government expenditures in a regime of low revenues kept the overall debt stock at very high levels.

“With the possible addition of existing ways and mean advances to the total debt stock, the overall burden of debt repayment and servicing looks alarming. At a projected fiscal deficit of N11.34tn in the 2023 budget, which is more than the projected overall revenue of N10.49tn, the expectations of any fiscal ease in 2023 may be unlikely.”

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