FISCAL OPERATIONS OF THE FEDERAL GOVERNMENT

The relevant data are given in the Annex tables 1-20 attached herewith.

The Federal Government’s total retained revenue, comprising its statutory allocations from the Federation Account, independent revenue, recoupment for loans on-lent to states and local governments, and such, in nominal terms increased seven-fold over the period 1985 – 1993 from some N9.64 billion in 1985. The growth rate of revenue was of course not uniform because of contributory factors and their dynamics, notably oil market and exchange rate developments. It was lowest in 1986 and highest in 1987, with oil revenue more than doubling and non-oil revenue contributing their fair quota. Total expenditure, always higher than total revenue, in nominal terms increased thirteen-fold over the period from N13.22 billion in 1985. The overall budget deficit thus increased from some N3.58 billion or 4.95 percent of GDP at market prices in 1985 to N107.19 billion or 15.38 percent of GDP in 1993. In real terms, however, the trend of total revenue was virtually flat, (with significant declines and a spike in 1990, indicating a general restraint on revenues), while that of total expenditure increased significantly. The impact of debt service, as a proportion of the Federal Government’s total retained revenue was very significant in the period, particularly between 1988 (59.51%) and 1993 (69.47%) with a maximum of 85.68 percent in 1991, indicating clearly the debt burden and its tendency to drive compensatory extra-budgetary expenditure.