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FG overspends N143.5bn in July, as crude oil hits 2.28mb

By Omoh Gabriel, Business Editor
LAGOS—FEDERAL Government overspent its budget estimate in July by N 143.52 billion. This was because the revenue retained by the Federal Government during the month was N185.06 billion, while total estimated expenditure was N328.58 billion.

Crude oil production, including condensates and natural gas liquids in July 2010 was estimated at 2.28 million barrels per day, mbd, or 70.68 million barrels. Crude oil export was estimated at 1.83 mbd or 56.73 million barrels for the month, while deliveries to the refineries for domestic consumption remained at 0.45 mbd or 13.95 million barrels.

The average price of Nigeria’s reference crude, the Bonny Light (370 API), estimated at US$76.42 per barrel, increased marginally by 0.2 per cent over the level in the preceding month.

Central Bank of Nigeria, CBN, monthly report of the nation’s economy for the month of July 2010 just released, revealed that “total federally-collected revenue in July 2010 was estimated at N 699.90 billion, representing an increase of 20 and 29.2 per cent relative to the proportionate monthly budget estimate and the receipts in the preceding month, respectively.”

The report stated: “At N 536.21 billion, gross oil receipts, which constituted 76.6 per cent of the total, exceeded the proportionate monthly budget estimate and receipts in the preceding month by 31.3 and 29.7 per cent, respectively.

“Federal Government estimated retained revenue in July 2010 was N185.06 billion, while total estimated expenditure was N328.58 billion. Thus, fiscal operations of the Federal Government resulted in an estimated deficit of N143.52 billion, compared with the monthly budgeted deficit of N129.23 billion for the review month.

“Non-oil receipts, at N 163.69 billion or 23.4 per cent of the total, was 6.3 per cent lower than the proportionate monthly budget estimate, but higher than the receipts in the preceding month by 27.7 per cent. The unimpressive performance relative to the proportionate monthly budget estimate, reflected largely the significant decline in independent revenue of the Federal Government and customs and excise duties.

“Foreign exchange inflow and outflow through the CBN in July 2010 were $2.29 billion and $4.03 billion, respectively, and resulted in a net outflow of $1.74 billion. Foreign exchange sales by the CBN to the authorized dealers declined by 12.2 per cent from the level in the preceding month to $2.58 billion, but increased by 41.8 per cent over the level in the corresponding period of 2009.
Non oil export earnings

The report said that non-oil export earnings by Nigerian exporters increased by 8.0 per cent over the level in the preceding month to US$202.8 million, and attributed the development largely to the rise in the prices of all the commodities traded at the international commodities market during the period.

World crude oil output in July 2010 was estimated at 86.38 million barrels per day, while demand was estimated at 84.51 mbd, representing an excess supply of 1.87 mbd, compared with 85.97 and 85.53 mbd supplied and demanded, respectively, in the preceding month. The development was attributed to the rising concerns about the slow pace of world recovery growth in the month under review.

On inflation, the report said “The end-period headline inflation rate (year-on-year), in July 2010, was 13.0 per cent, compared with 14.1 per cent recorded at the end of the preceding month. Inflation rate on a twelve-month moving average basis in July 2010 was 13.3 per cent, compared with 13.1 per cent recorded in the  preceding month.”


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