Economy
FG incurred N397.74bn deficit in May——CBN
Federal Government incurred a deficit of N397.74 billion in the Month of May according to the Central Bank of Nigeria Monthly Economic Report for May 2017. The report said “the fiscal operations of the Federal Government resulted in an estimated deficit of N397.74 billion. Total estimated Federal Government expenditure, rose by 3.0 per cent, compared with the level in the preceding month.
“Federally-collected revenue (gross) in May 2017 was estimated at N458.42 billion. This was below the monthly budget estimate of N894.76 billion by 48.8 per cent. It was also lower than the receipt in April 2017 by 13.4 per cent. The fall relative to the monthly budget estimate was attributed, largely, to the short fall in both oil and non-oil revenue components. At N458.42 billion, the estimated federally- collected revenue (gross) in May 2017, fell short of the monthly budget estimate of N894.76 billion by 48.8 per cent.”
According to the CBN “gross oil receipts, at N238.09 billion or 51.9 per cent of total revenue, was lower than the monthly budget estimate of N449.62 billion by 47.0 per cent. It was also below the April collection of N303.43 billion by 21.5 per cent. The decline in oil revenue relative to the monthly budget estimate was attributed to the short fall in revenue from crude-oil and gas exports and PPT/Royalties. At N238.09 billion, oil receipts (gross) was lower than the monthly budget estimate by 47.0 per cent, and constituted 51.9 per cent of the total revenue.
“ At N220.33 billion or 48.1 per cent of total revenue, non-oil revenue was below the monthly budget estimate of N445.14 billion by 50.5 per cent. It was also below the April collection of N225.71 by 2.4 per cent. The poor performance relative to the budget was due to the effect of the slowdown in general economic activities which impacted negatively on most of the components of the non-oil revenue. At N220.33 billion, non-oil receipts (gross) was lower than the monthly budget estimate by 50.5 per cent and constituted 48.1 per cent of the total revenue.”
Continuing the CBN report said “of the total federally-collected revenue (net), N258.86 billion was retained in the Federation Account, while N81.29 billion, N21.68 billion and N17.56 billion were transferred to the VAT Pool Account, the Federal Government Independent revenue and “Others”, respectively.
“From the sum of N258.86 billion in the Federation Account for distribution, the Federal Government received N124.44 billion, while the State and Local Governments received N63.12 billion and N48.66 billion, respectively. The balance of N22.64 billion was shared among the oil producing States as 13 per cent Derivation Fund. In addition, the net balance of N81.29 billion retained in the VAT Pool Account was shared as follows: Federal Government, N12.19 billion; State Government, N40.64 billion; and Local Government, N28.45 billion.
“Similarly, the sum of N20.42 billion was distributed from the Excess Crude Account. The Federal, State and Local Governments received N9.36 billion, N4.75 billion and N3.66 billion, respectively. The Oil producing states received an additional N2.66 billion as 13 per cent Derivation Fund.
Furthermore, the sum of N38.52 billion was also shared as Exchange Gain in the order: Federal Government, N17.90 billion; State Governments, N9.08 billion; Local Governments, N7.00 billion and 13 per cent Derivation Fund, N4.54 billion. Overall, the total allocations to the three tiers of government in May 2017 amounted to N399.09 billion. This was below the monthly budget estimate of N783.57 billion by 49.1 per cent. It also fell below the April 2017 total share by 12.3 per cent.
It said “the estimated Federal Government retained revenue for the month of May 2017, at N185.58 billion, was below the monthly budget estimate of N449.60 billion by 58.7 per cent. It was also lower than the preceding month’s receipt of N221.48 by 16.2 per cent. Of the total receipt, Federation Account accounted for 67.0 per cent, while FGN Independent Revenue, Others/Exchange Gain/NNPC Fund, VAT and Excess Crude recorded 11.7, 9.6, 6.6 and 5.1 per cent, respectively. At N185.58 billion, the estimated Federal Government retained revenue was below the monthly budget estimate by 58.7 per cent.
“The estimated total expenditure of the Federal Government, at N583.32 billion, fell short of the 2017 provisional monthly budget estimate by 9.7 per cent. It, however, rose above the level in April 2017 by 3.0 per cent. Recurrent and capital expenditure accounted for 61.0 per cent and 34.3 per cent, respectively, while transfers accounted for the balance of 4.7 per cent of the total expenditure. A breakdown of the recurrent expenditure showed that non-debt obligation was 76.8 per cent of the total, while debt service payments accounted for the balance of 23.2 per cent.
Overall, the fiscal operations of the Federal Government resulted in an estimated deficit of N397.74 billion, compared with the 2017 provisional monthly budget deficit of N196.40 billion.
The fiscal operations of the FG resulted in an estimated deficit of N397.74 billion.
Total estimated Federal Government expenditure, rose by 3.0 per cent, compared with the level in the preceding month.”
According to the CBN “Total estimated statutory allocations to the State Governments amounted to N147.42 billion. This was lower than the monthly budget estimate of N282.84 billion by 47.9 per cent. It was also below the April allocations of N163.74 billion by 10.0 per cent. Receipt from the Federation Account amounted to N106.78 billion or 72.4 per cent of the total statutory allocations. This was below the monthly budget estimate of N210.84 billion by 49.4 per cent. It also fell short of the receipt in April by 15.2 per cent. At N40.64 billion or 27.6 per cent of the total, allocation to the VAT Pool Account fell short of the monthly budget estimate of N72.00 billion by 43.6 per cent. It, however, increased relative to the level in April by 7.7 per cent. Total allocations to Local Governments from the Federation and VAT Pool Accounts in the month of May stood at N87.77 billion. This was below the monthly budget estimate of N170.92 billion by 48.6 per cent. It also fell below the preceding month’s receipt by 8.6 per cent”.
The CBN report said that “domestic crude oil production was estimated at 1.63 mbd or 50.53 million barrels (mb) in May 2017. Crude oil export was estimated at 1.18 mbd or 36.58 mb in the review month. The average spot price of Nigeria’s reference crude oil, the Bonny Light (37° API) fell to $51.20 per barrel in May 2017 from $52.89 per barrel recorded in April 2017, representing a decline of 3.20 per cent.
“Foreign exchange inflow and outflow through the CBN in May 2017 were $2.26 billion and US$3.02 billion, respectively, and resulted in a net outflow of $0.76 billion. Aggregate foreign exchange flow through the economy, however, resulted in net inflow of $2.60 billion in the review month. Foreign exchange sales by the CBN to the authorised dealers amounted to $2.64 billion and represented a 70.8 per cent increase above the level in April 2017.”
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
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