According to the first quarter, 2022 report of the Budget Office of the Federation, the financial operations of the Federal Government recorded a massive deficit of N3.55 trillion as revenue fell far below budget estimates.
The figure according to the report represents a huge 128.5 per cent (about N2.0 trillion) rise beyond the projected deficit for the period.
The Office attributed the pressures on the FG’s finances to oil sector failures including subsidy costs as well as the on-going war between Russia and Ukraine.
According to a report by Vanguard, the 2022 Fiscal Framework, quarterly fiscal deficit is estimated at N1.55 trillion, which is expected to be financed through earnings from privatization proceeds as well as foreign and domestic borrowings.
However, the inflow and outflow of funds for the Federal Government resulted in a fiscal deficit far above the projection.
Only N950 billion was financed through domestic borrowing, mainly by way of Federal Government Bond. This resulted in a N2.6 trillion net deficit financing for the review period.
This, according to financial experts, indicates that the government’s deficit financing especially from the international debt market, may have run into troubled waters, while domestic borrowing escalates.
Also the rising domestic borrowing in the second quarter has escalated debt servicing to revenue ration at about 138 percent.