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Analysts at FBNQuest Research have expressed concern over the Federal Government’s fiscal operations which they said show a “concerning trend “of revenues consistently falling short of expenditures.
The analysts stated this in a report which focused on the 2025-2027 Medium Term Expenditure framework recently released by the Budget Office of the Federation.
According to the analysts, the consistent revenue underperformance results, “in a sustained reliance on debt.” The analysts stated:
“According to the publication of the 2025-2027 Medium Term Expenditure framework, focusing on the FGN’s fiscal operations, the aggregate revenue that accrued to the FGN over the 8M 2024 period amounted to N12.7 trillion, -3 per cent lower than the pro-rata benchmark of N13.1 trillion.
In terms of expenditure, the FGN’s cumulative spending over the period amounted to almost N17.0 trillion, representing a -27 per cent shortfall relative to the pro-rata budget of N23.4 trillion.
Overall, the FGN’s fiscal operations resulted in a fiscal deficit of N4.2 trillion, much lower than the projected fiscal deficit of N10.3 trillion for the period. “Revenue underperformance was primarily driven by oil revenue, which amounted to N4.1 trillion, with a shortfall of N1.4 trillion relative to the target for the period.
“The deficit was largely due to a lower average oil production of 1.3 million barrels per day (mbpd), compared with the 1.78 mbpd anticipated in the 2024 budget.
“Conversely, non-oil revenue, which totalled N8.6 trn, outperformed the prorata target of N7.6 trillion, thanks to strong performances by companies’ income tax, value-added tax, and FGN independent revenue, which exceeded their benchmarks by between 28 per cent and 75 per cent.”
They further said: “In contrast to prior years, when actual expenditure closely tracked the budgeted amount, the FGN’s total spending for the period was N17 trillion, significantly lower than the N23.4 trillion run rate implied by the budget.
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