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CBN says govt prudence saved N116bn H2 2014

By BusinessNews Staff on May 7, 2015

The Central Bank of Nigeria (CBN) on Tuesday dismissed an earlier report suggesting that the Federal Government
overspent the budget by N365.35 billion during the second half of 2014.

The bank says its Financial Stability Report from which the story was drawn from clearly stated that the “fiscal operations of the Federal Government resulted in an overall deficit of N365.35 billion or 0.8 percent of the GDP, as
against the proportionate budget deficit of N482.10 billion for the second half of 2014.”

The deficit was mostly financed from privatisation proceeds, according to the CBN statement sent by Ibrahim Mu’azu, its director of corporate communications.

Mu’azu explained that the Federal Government had initially projected to run a budget deficit of N482.10 billion during the second half of 2014, but had an outcome of N365.35 billion, so much less than the budgeted, contrary to the position held by the newspaper report (not BusinessDay).

“The difference of over N116 billion indicates some prudence, rather than profligacy in fiscal management”, the director maintained.

“The Central Bank of Nigeria will also like to note that deficit financing of budgets which is within the Fiscal Responsibility Act is a widely accepted fiscal practice.”

[Business Day]

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