FG earning drops 17% in August – Report

Despite the upward movement in economic activities, the Central Bank of Nigeria (CBN) earning by the federal government declined by 17 per cent in August. 

In its ‘ECONOMIC REPORT’ for the month of August 2021, the Apex Bank added that retained revenue for the month under revenue dropped to 

10.4 per cent and 43.5 per cent as compared to July. 

“The fiscal operations of the government in the review period was anchored on the 2021 Appropriation Act and the Medium-Term Expenditure Framework & Fiscal Strategy Papers (MTEF&FSP 2021-2023), which seek to achieve macroeconomic stability, job creation, and to mitigate the 

impacts of the COVID-19 pandemic, among others. 

“Triggered by shortfalls 

in non-oil receipts, federation earnings declined by 17.1 per cent, relative to its July level. The retained revenue of the Federal Government (FGN) also fell by 10.4 per cent and 43.5 per cent, compared with receipts in July and the revenue target, respectively; an indication of persisting revenue challenges,” the report stated.

However, the lender of last resort noted that, the 18.8 per cent drop in federal government expenditure recorded in August was more than offset the fall in revenue, 

resulting in a 25.2 per cent contraction in overall deficits.

On the balance of risks, the Apex Bank said “the growth outlook remains positive for the rest 

of 2021, on the back of stable crude oil prices, increased production by the Organisation of the Petroleum Exporting Countries plus (OPEC+) and allies, sustained policy support, and further easing of supply chain bottlenecks. 

“Nonetheless, supply chain disruptions in the forms of lingering insecurity affecting agricultural output, power supply challenges inhibiting manufacturing activities, and rising food prices, amongst others, could impede growth prospects.”

The report further sated that external reserves registered an accretion due to the IMF’s additional allocation of $3.34 billion SDRs.

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