Federal Government recorded N7.34tn fiscal deficit between January 2022 and November 2022, according to figures obtained from the Central Bank of Nigeria (CBN).
The CBN revealed this in the statement presented by a member of the Monetary Policy Committee, Mike Obadan, at the last MPC meeting in January.
Speaking on the fiscal operations of the government, he 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.
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.
He said the Nigerian economy was highly challenged in 2022 as reflected by weakening growth performance, high and escalating inflation, foreign exchange market pressure and depreciating exchange rate, ballooning fiscal deficits and public debt and expanding money supply among others.
Macroeconomic performance in the country, he said 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.
According to an 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.