Nigeria’s federally collected revenue declines by 13.42 per cent
• Crude oil earning drops to N292.82 billion
Crude oil and non-oil income has cut Nigeria’s gross federally collected revenue in May 2017 by 13.42 per cent to N458.42 billion. Specifically, Nigeria’s crude oil earnings decreased from the N292.82 billion it recorded in February to N238.09 billion in May.
With Nigeria’s capital expenditure put at N2.24 trillion and a large potion of it expected to come from the oil and gas sector, financing the 2017 budget will be a challenge for the Nigeria government.
The country’s Federally generated monthly revenue was however, lower than the receipt in April 2017 by 13.4 per cent, reflecting decline in both oil and non-oil revenue components.
According to the Central Bank of Nigeria (CBN) in its latest economic report for the month of May, oil and non-oil receipts were at N238.09 billion and N220.33 billion, respectively, constituted 51.9 per cent and 48.1per cent of total revenue.
It put the Federal Government retained revenue and estimated expenditure for May 2017 at N185.58 billion and N583.32 billion, respectively, resulting in an estimated deficit of N397.74 billion.The apex bank stated that domestic crude oil production was estimated at 1.63 mbd or 50.53 million barrels (mb) in May
Crude oil export was estimated at 1.18 mbd or 36.58 mb in the review month. It disclosed that the average spot price of Nigeria’s reference crude oil, the Bonny Light fell to $51.20 per barrel in May 2017from $52.89 per barrel recorded in April 2017, representing a decline of 3.20 per cent.
The CBN stated: “Sustained breather in the sabotage of crude oil installations by the militants in the Niger Delta eased upstream production conditions and led to increased crude oil production in May 2017.
“Consequently, Nigeria’s crude oil production, including condensates and natural gas liquids averaged 1.63 mbd or 50.53 million barrels (mb) in the review month. This represented an increase of 0.13 mbd or 8.67 per cent above the 1.50 mbd or 45.00 mb recorded in April 2017.
“Crude oil export stood at 1.18 mbd or 36.58 mb, represented 12.4 per cent increase, compared with 1.05 mbd or 31.50 mb recorded in the preceding month. Allocation of crude oil for domestic consumption remained at 0.45 mbd or 13.95 mb during the review period.
“The uncertainty in the international crude oil market continued into the review month despite ongoing production cut agreement among Organisation for Petroleum Exporting Countries (OPEC) members and selected non-members.”
Speaking on the need for Nigeria to diversify from the oil sector to the non-oil sector, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, stated that it would help the country to insulate the economy from the risk of being vulnerable to a single-commodity as the different oil price crashes have shown. Second, to create jobs that can raise the standard of living of an average Nigerian.
He said that oil and gas jobs account for less than one per cent of total employment and the young population can no longer be absorbed by the public sector. “Diversification has been the subject of numerous plans and initiatives by the government although the statistics are broadly unchanged at least from the revenue and export perspective.
The Chief Executive Officer of Multimix Group, Obiora Madu said that the nation is going through recessionary pressures; massive drop in income and output, fundamental industrial restructure in response to the diversification, import substitution and backward integration agenda.
According to him, the national response is an offensive at structural transformation of the economy with industrial diversification, import substitutions and backward integration strategies leading the charge.