FG generates N1.64trn from oil, non-oil sectors in 2 months — CBN
…records N485.51bn fiscal deficit …as Banks, others borrow N492.50bn
By Kayode Tokede
The Central Bank of Nigeria (CBN) has disclosed that the Federal government between December 2020 and January 2021 generated a sum of N1.64trillion from Oil and Non-Oil sectors.
The breakdown revealed that the federal government in two months under review generated N772.15 billion and N869.13billion from Oil and Non-Oil sectors respectively.
Our correspondent gathered that revenue from the Oil sector dropped by nearly 10 per cent from N405.62 billion in December 2020 to N366.53 billion, while revenue from Non-Oil sector rose by three per cent to N441.01billion as at January 2021 from N428.12billion reported in December 2020.
The apex bank who disclosed this in its January 2021 Economic Report released during the weekend noted the Federation Account realised the sum of N807.54 billion in January 2021, 45.4 per cent of which was from oil and 54.6 per cent from non-oil revenue sources.
According to the report, “The amount was 4.6 per cent below the budget benchmark and 12.8 per cent below receipts in the corresponding period of 2020. Of the realised sum, N258.07 billion represented statutory deductions and non-federation transfers, leaving a net balance of N549.47 billion. An additional sum of N10.73 billion was realised from Forex Equalisation and Exchange Gain, bringing the total net distributable sum to the three tiers of government to N560.20 billion.
“Although the disbursement was an improvement on the preceding month’s allocation of N544.95 billion, it fell short of the provisional budget estimate and disbursement in January 2020, by 9.8 per cent and 16.8 per cent, respectively.
“The shortfall in allocations was attributed to the low receipts into the Federation Account and the relatively high statutory deductions. The shortfall in revenue target is likely to further constrain fiscal policy implementation, particularly, at the sub-national governments, where a chunk of annual budgets was expected to be financed from the FAAC allocations.”
In the same report, the CBN disclosed that the Federal Government recorded an estimated fiscal deficit of N485.51 billion in January.
The report by CBN noted that the government’s fiscal deficit for the first month of the year “was 17.1 per cent and 11.5 per cent higher than the target budget deficit and the level in January 2020.
CBN attributed the rise in the fiscal deficit to the rollover and release of outstanding (capital) allocations to the Ministries Departments and Agencies (MDAs) in the 2020 budget, which pushed up aggregate expenditure.
The regulator, however, stated that the disbursement was, “unlikely to constitute liquidity risks, as it had already been accommodated in the financial programme of the government in the 2020 fiscal year.
The report explained that Deposit Money Banks (DMBs) and merchant banks made more placements than borrowings in the Standing Facilities window in January 2021.
According to the report, the trend showed that banks deposited more than they borrowed at the window, due to the liquidity condition in the banking system, with applicable rates for the Standing Lending Facility (SLF) and Standing Deposit Facility (SDF) at 12.5 per cent and 4.5 per cent, respectively.
“Total request for the SLF and granted from January 1–31, 2021 was N492.50 billion, made up of N68.30 billion direct SLF and N424.20 Intraday Lending Facilities (ILF) converted to overnight repo.
“Daily average was N35.18 billion in 14 transaction days from January 1–31, 2021 with a total interest of N0.29 billion.
“Total SDF granted, during the review period, was N528.33 billion with a daily average of N26.42 billion in 20 transaction days from January 1-31, 2021. Daily request ranged from N4.70 billion to N42.59 billion.”
On foreign exchange sales during the review period, the report said: “Total foreign exchange sales to authorised dealers by the Bank was $1.47 billion in January 2021, a decrease of 47.4 per cent and 64.0 per cent from the level in the preceding month and corresponding period of 2020, respectively.
“A disaggregation showed that foreign exchange sales at the I&E, SMIS, SME, and interbank fell by 79.9 per cent, 38.3 per cent, 19.8 per cent, and 37.3 per cent to $0.22 billion, $0.48 billion, $0.10 billion, and $0.04 billion, respectively.
“Similarly, foreign exchange cash sales to BDC operators and matured swap transactions fell by 19.3 per cent and 48.7 per cent, compared with its level in the preceding month to US$0.42 billion and $0.12 billion, respectively, in the review period.
“Foreign exchange turnover at the investors and exporters’ market stood at $57.28 million in January 2021, showing a decline of 60.6 per cent from the $145.20 million in December 2020, and 80.7 per cent from the level in the corresponding period of 2020.”
The report stated that a total of $0.38 billion new capital was imported into the economy in January 2021, compared with $0.55 billion in December 2020.
According to the report, “A disaggregation of capital importation by type of investment showed that inflow of other investments (OI) accounted for the largest share at $0.29 billion, and represented 75.5 per cent of the total, followed by foreign direct investment (FDI) inflow of $0.06 billion, which accounted for 16.4 per cent.
“Foreign portfolio investment (FPI) inflow, at $0.01 billion, constituted 8.1 per cent of the total. When compared with the $0.44 billion, $0.09 and $0.02 billion for OI FDI and FPI, respectively, in the previous period, it indicated a decline of 34.1 per cent, 33.3 per cent and 50.0 per cent, respectively.”
In terms of capital importation by nature of investment, banking accounted for 39.6 per cent; shares, 31.5 per cent; production/manufacturing, 12.8 per cent; telecommunication, 6.1 per cent; financing, 6.0 per cent; and agriculture, 4.0 per cent.
“Other sectors accounted for the balance. A breakdown of capital importation by originating country showed that the United Kingdom, The Netherlands, Republic of South Africa, United Arab Emirates, Singapore, Denmark and Hong Kong accounted for 46.8 per cent, 20.1 per cent, 7.9 per cent, 6.5 per cent, 4.2 per cent, 3.2 per cent and 3.1 per cent, respectively, of the total inflow.
“By destination of capital, Lagos State, Abuja (FCT) and Ogun State were the top recipients of the inflow at $0.18 billion (75.6 per cent), $0.08 billion (24.1 per cent), and $0.006 billion (0.2 per cent), respectively.”
