from OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – LOW oil revenue, attributable to crude oil theft and pipeline vandalism, is exacerbating fiscal pressures on the Nigerian economy.
The Central Bank of Nigeria’s monthly economic report for February this year shows that the country’s gross revenue fell by 11 percent year-on-year (y/y) and 15 percent month-on-month (m/m) to N799,6 billion (US$1,925 billion).
“The sharp fall in the gross federally collected revenue was mostly attributable to lower oil revenue,” explained FBN Quest, the market watcher.
It noted oil’s share of gross revenues fell to a 26 percent of total receipts compared with 35 percent the previous month, and 41 percent in the year-earlier period.
On a monthly basis, oil revenue fell 37 percent and 44 percent y/y to N208 billion, well below the budgeted monthly benchmark of N506 billion.
According to some estimates leakages from oil theft and vandalism amount to around 20 percent of the daily oil output in Africa’s largest producer of the commodity.
Meanwhile, non-oil revenue, which made up almost 74 percent of the total revenue, decreased by 4 percent m/m to about N591 billion.
Nonetheless, on a y/y basis, it was up 11 percent y/y.
The major driver behind the m/m reduction in non-oil revenue was a 34 percent m/m drop in companies’ income tax.
FBN Quest said on a positive note, the government’s independent revenue increased by 33 percent m/m to N167 billion.
Despite high oil prices, the agency anticipates the fiscal strains would continue because of limited oil production and the government’s continued provision of fuel subsidies for gasoline.
It consumes a sizable portion of the earnings from crude oil exports.
– CAJ News