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HomeTop NewsNigeria earns N1.38 trln revenue from oil in Q4 2022, 12.2% higher...

Nigeria earns N1.38 trln revenue from oil in Q4 2022, 12.2% higher than previous ~CBN

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By Oludare Mayowa

Nigeria earned a total of N1.38 trillion in oil revenue in the fourth quarter of last year, representing a 12.2 percent improvement over the previous quarter’s revenue, according to the Central Bank of Nigeria (CBN).

In its fourth-quarter economic report, the regulatory bank said the improvement in oil revenue was driven by increased production and the rise in earnings from petroleum profit tax and royalties.

The report, however, said that despite the improvement in quarter-to-quarter revenue, Q4 earnings fell short of the quarterly benchmark oil receipt by 41.8 percent.

“Oil revenue, at N1,382.82 billion, improved by 12.2 percent relative to the preceding quarter. This was driven by improved domestic crude oil production and the 18.8 percent rise in receipts from petroleum profit tax and royalties.

“It, however, fell short of the quarterly benchmark oil receipt by 41.8 percent, owing to lower export receipts and cost recovery payments.

“In contrast, non-oil receipts at N2,111.63 billion declined by 18.0 percent and 10.7 percent, respectively, relative to 2022Q3 and the quarterly budget.

“The decrease was largely attributed to lower collections from company income tax, customs and excise duties, and VAT. Nonetheless, collections from company income tax and value-added tax, at N569.46 billion and N650.83 billion, exceeded their quarterly targets by 14.6 percent and 6.6 percent, respectively.

“The decline in non-oil revenue relative to the preceding quarter reflected seasonality in tax returns,” the CBN stated in the report.

The fiscal position of the Federal Government of Nigeria (FGN) remained constrained in 2022 Q4, occasioned by lower crude oil exports and rising cost recovery payments.

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Notably, FGN retained revenue fell by 18.2 percent relative to 2022 Q3, following a 70.8 percent drop in allocation from other revenue sources. Compared with the quarterly target, retained revenue shrank by 39.7 percent.

Aggregate expenditure fell for the third consecutive quarter in 2022, declining by 18.8 percent and 47.6 percent, respectively, relative to 2022 Q3 and the 2022 quarterly benchmark.

Consequently, the fiscal deficit narrowed by 20.0 percent and 58.3 percent, respectively, compared with the preceding quarter and the quarterly budget. Total public debt, at N46.25 trillion (or 23.2 percent of GDP) at end-December 2022, remained within the statutory threshold.

Also, the report stated that a total of N2.34 trillion was disbursed to the three tiers of government after accounting for statutory deductions and transfers, as well as additional revenue from non-oil excess revenue and exchange gain.

“Of this amount, the federal government got N915.11 billion, while state and local governments received N729.18 billion and N539.99 billion, respectively.

“The balance of N154.79 billion was distributed to oil-producing states as a 13.0 percent derivation fund. Total disbursement to the federating units was 3.7 percent below the amount shared in 2022 Q3 and 35.1 percent short of the quarterly projection.

“The retained revenue of the FGN declined on the back of a lower allocation from the Federation Account. At N1.50 trillion, the estimated retained revenue of the FGN was 18.2 percent below receipts in 2022 Q3 and 39.7 percent short of the quarterly target.

“Although receipt from FGN independent revenue, at N448.24 billion, exceeded collection in the preceding quarter by 20.4 percent, it was short of the target by 58.7 percent,” the CBN said.

Following a decline in interest payments and capital spending, the provisional aggregate expenditure of the FGN decreased by 18.8 percent and 47.6 percent, respectively, relative to 2022 Q3 and the quarterly budget.

The provisional aggregate expenditure of the FGN in 2022Q4 amounted to N2.27 trillion. A breakdown shows that recurrent expenditure, capital expenditure, and transfers accounted for 83.6 percent, 10.7 percent, and 5.7 percent of total expenditure, respectively, a deviation from the projected expenditure mix of 61.8 percent, 40.5 percent, and 6.7 percent in the 2022 budget.

The decline in expenditure in the review period induced a contraction in the overall deficit. At N765.61 billion, the provisional fiscal deficit of the FGN was 20.0 percent and 58.3 percent below the levels in the preceding quarter and the 2022 proportionate budget, respectively.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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