05 May 2015, Lagos – The Central Bank of Nigeria, CBN, yesterday, said the fiscal operations of the Federal Government in the second half of 2014 resulted in an over-spending of the budget by N365.35 billion or 0.8 per cent of GDP, as against the proportionate projected budget deficit of N482.10 billion for the period and N325.10 billion recorded in the first half of the year.
This fact is contained in the Financial Stability report of the CBN released on Thursday but published yesterday on its website. The report said that “the deficit was financed mostly from privatisation proceeds.” According to CBN, “the second half of 2014 also witnessed the commencement of a sustained decline in international oil prices, a development that signalled a decline in government revenue in 2015, given the traditional dominance of oil receipts in its revenue profile. “The Federal Government’s retained revenue for the second half of 2014,” the report noted, “increased to N1.95119 trillion, from N1.77127 trillion in the first half, but was lower than the budget estimate of N2.13404 trillion.” Analysis of the retained revenue showed that the Federal Government’s share of the Federation Account was N1.40394 trillion (71.9 per cent); the VAT Pool Account, N55.62 billion (2.9 per cent); the Federal Government Independent Revenue was N284.14 billion (14.6 per cent); SURE-P netted N97.76 billion (5.0 per cent); while others, including excess crude and NNPC additional revenue, accounted for the balance of N109.73 billion (5.6 per cent).” The report said the “Federal Government expenditure grew by 10.5 per cent to N2.31654 trillion, from N2.09637 trillion in the first half, compared with the budgeted expenditure of N2.61614 trillion for the second half of 2014.” On the economy According to the CBN report on the economy, “provisional data from the National Bureau of Statistics, NBS, indicated that the domestic economy expanded further in the second half of 2014. Gross Domestic Product, GDP, measured in real terms recorded a growth of 13.03 per cent over the level in the preceding half year, in 10 contrast to the 6.14 per cent decline in the first half against end December 2013 performance. It was, however, 0.31 percentage point below the 13.34 per cent recorded in the corresponding period of 2013. “Overall, growth in real GDP continued to be buoyed by sustained expansion in the non-oil sector, though it was moderated by the lull in the oil sector, owing to the drastic fall in the international oil prices. The non-oil sector recorded 15.06 per cent growth in real terms in the second half of 2014, compared with the 7.04 per cent decline in the preceding first half. “The growth in the non-oil sector was driven mainly by significant expansion in the agriculture sector, particularly, the crop production activities. “Correspondingly, the contribution of the non-oil sector stood at 90.31 per cent, indicating an increase of 1.6 and 0.7 percentage points over the 88.71 and 89.57per cent recorded in the preceding half year and corresponding period of 2014, respectively. “In real terms, the agriculture sector recorded the highest level of growth at 40.5 per cent, followed by the services sector 10.4 per cent, trade 6.9 per cent, and manufacturing 3.6 per cent. “In terms of sectoral contribution, the services sector accounted for the largest share 35.7 per cent of real GDP. This was followed by agriculture 25.2 per cent, trade 16.1 per cent, crude petroleum, natural gas and solid minerals 10.0 per cent, manufacturing 9.5 per cent, and construction 3.5 per cent. “Activities in the oil sector witnessed challenges, arising from falling oil prices during the second half of 2014. Although average daily production of crude oil rose to 2.18 million barrels per day in the fourth quarter, from 2.15 in the third quarter, oil as a percentage of GDP declined by 2.9 per cent in contrast to 1.6 per cent growth in the first half. “Further analysis also indicated that the oil sector contributed 9.7 per cent to real GDP in the second half, showing 1.59 and 0.73 percentage points decline below the contributions in the preceding half year and the corresponding period of 2013, respectively.”