January 2, 2025/CSL Research
The Central Bank of Nigeria (CBN) recently released its October 2024 Economic Report, which provides an overview of economic developments across the real, fiscal, financial, and external sectors of the Nigerian economy. In the fiscal space, provisional data for October 2024 revealed a decline in gross federation account earnings, driven by reduced revenue from both oil and non-oil sources. The gross federation account receipts for October stood at ₦1,988.47 billion, representing a decrease of 7.87% compared to September 2024 (₦2,158.24 billion) and falling 33.72% short of the budget target of ₦3,000.01 billion.
Non-oil revenue accounted for 81.59% of the total, amounting to ₦1,622.44 billion. Although this was 5.70% lower than the ₦1,720.54 billion recorded in September 2024, it exceeded the budget target of ₦1,232.82 billion by 31.60%. Oil revenue, on the other hand, contributed 18.41% of total receipts, amounting to ₦366.03 billion. This represented a 16.37% month-on-month decline from ₦437.69 billion in September 2024 and was 79.29% below the budget target of ₦1,767.19 billion. The decline in oil revenue was primarily attributed to lower collections from Petroleum Profit Tax (PPT) and Company Income Tax (CIT) in the upstream sector, while the significant shortfall from target is attributed to production disruptions caused by ageing pipelines and installations.
The Federal Government of Nigeria (FGN) retained revenue of the overall federation account receipt rose during the review period owing largely to higher receipts from FGN’s share of excess non-oil revenue. At ₦763.79 billion, provisional FGN retained revenue was 6.07% higher m/m compared to ₦720.09 billion in September 2024, but 53.23% short of the target (₦1,633.21 billion). The provisional aggregate expenditure of the FGN rose, following higher capital spending. This was ₦1,832.23 billion in October 2024, higher by 28.43% m/m compared to ₦1,426.65 billion in September 2024, but 23.60% short of the target of ₦2,398.12 billion.
The fiscal deficit of the Federal Government of Nigeria (FGN) widened in October 2024, reflecting increased spending relative to revenue. Provisional data showed that the primary deficit and overall deficit rose by ₦362.85 billion and ₦361.89 billion, reaching ₦383.29 billion and ₦1,068.45 billion, respectively. This was a significant increase from the deficits recorded in September 2024, which stood at ₦20.44 billion and ₦706.56 billion. The deficit expansion highlights the need to improve the fiscal space through diversified revenue streams, even as efforts to enhance tax collections are underway.
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