Nigeria revenue rise 27% in June to N563 bln due to exchange rate, oil recovery
Nigeria said the recovery in global oil prices and gains from exchange rate adjustment boosted its revenue earnings in June to N653.35 billion, up 27.17 percent over the N517.8 billion recorded in May, accountant general Ahmed Idris said.
Ahmed said in a statement that the government generated N42.83 billion from exchange rate gains, while income from crude sales and Value Added Tax (VAT) made up the bulk of gross revenues.
In February, Nigeria increased VAT to 7.5 percent from 5 percent to boost revenues, seen among the lowest in the world. Lower government revenue could worsen Nigeria’s debt to revenue ratio this year from a year earlier.
Nigeria has revised its revenue projections from crude oil export downward to $28 per barrel from the $57 per barrel it was initially placed due to the sharp drop in global oil prices in the wake of the coronavirus pandemic outbreak.
The coronavirus outbreak early this year prompted a sharp fall in oil prices, Nigeria’s main export, slashing government revenues, weakening its currency and creating a large financing gap for the country.
Oil prices in the international market has since recovered to about $43 a barrel from a 21-year low below $16 in April.
Nigeria, which is a member of the oil cartel, the Organisation of Petroleum Producing Countries (OPEC) depends largely on crude oil sales for two-thirds of government revenue.
The recent adjustment in foreign exchange rate by the Central Bank of Nigeria (CBN) from N307 to N360 per dollar first in March and later adjusted to N381 at the NIFEX window could further boost Nigeria’s revenue from oil in naira term.