By Babajide Komolafe
THE Central Bank Bank of Nigeria, CBN, said yesterday the Federal Government overspent by N1.1 trillion in 2010.

According to the apex bank’s Assistant Director, Research, Mr Adebayo Idowu in a paper he presented at a one-day policy seminar on the 2011 Federal Government budget organised by the Chartered Institute of Bankers of Nigeria, CIBN, “overall, fiscal operations (provisional) of the Federal Government in 2010 resulted in a deficit of N1,105.4 billion or 3.7 per cent of GDP, compared with a deficit of N810.01 billion or 3.3 per cent of GDP in 2009.”

The deficit, he said, was financed substantially through the issuance of the FGN bonds largely subscribed by the deposit money banks and the non-bank public.

Reviewing the implementation of the 2010 budget in his paper entitled: “Macroeconomic framework  and policy consistency: Budget 2011 in perspective,” he said: “On the expenditure side, the recurrent and capital outlays surpassed the budget projections for the year. This was as a result of the passage of supplementary budgets in response to favourable oil receipts as well as the need to address the problems in the critical sectors of the economy.

“An evaluation of the Budget 2010 performances using some selected macroeconomic indicators revealed that real GDP grew by 7.9 per cent, indicating a rise of 0.9 percentage point above the 7.0 per cent achieved in 2009. The observed growth was largely attributed to greater co-ordination of fiscal and policies complemented by the favourable crude oil prices in the international market.

“Industrial GDP grew by 3.3 percentage points to 5.3 per cent owing to the Federal Government efforts at rejuvenating manufacturing activities particularly, the intervention in small and medium enterprise (SMEs) and critical infrastructure, among others. With this development, the industrial sector witnessed two years (2009 & 2010) of successive growth which represented a complete turn-around from the declining fortune in 2005 through 2008.

“Furthermore, fiscal year 2010 also witnessed slight improvement in manufacturing capacity utilization as it rose by 0.8 percentage point from its level of 55.0 per cent in the preceding year to 55.8 per cent in 2010. Nevertheless, inflationary level moderated to 11.8 per cent by the end of the year from the 13.9 per cent recorded in 2009 and above the single-digit projected for the year”.