According to information gathered from the Central Bank of Nigeria, the Federal Government ran a fiscal deficit of N7.34 trillion between January 2022 and November 2022.
“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,” said a member of the Monetary Policy Committee, Mike Obadan, at the most recent MPC meeting in January.
“The Federal Government ran a fiscal deficit of N7.34 trillion from January to November 2022. The federal government’s fiscal deficit for 2023 is anticipated to be N11.34 trillion, which deficit financing will partially finance. The challenge for inflation control lies here.
He stated that the weakening growth performance, high and escalating inflation, foreign exchange market pressure and a depreciating exchange rate, ballooning fiscal deficits, public debt, and an expanding money supply, among other indicators, indicated that the Nigerian economy would face significant difficulties in 2022.
He stated that the country’s macroeconomic performance had continued to be impacted by spillovers from the major economies: geopolitical tensions, disruptions to the supply chain, high inflation, high prices for food and energy, and tighter financial conditions, among other things.
“The fiscal sector challenges persist and may even worsen in 2023 with rising debt levels and expected deficit position,” says Robert Asogwa, a member of the MPC. In a regime with low revenues in 2022, the massive expenditures made by the government maintained the overall debt stock at very high levels.
“The overall burden of debt repayment and servicing appears to be alarming, with the possible addition of existing ways and mean advances to the total debt stock. The expectations of any fiscal ease in 2023 may be unlikely at a projected fiscal deficit of N11.34 trillion in the budget for 2023, which is greater than the projected total revenue of N10.49 trillion.