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Oil revenue rises 8% to N1.5trn

By Babajide Komolafe

The fiscal spending of the Federal Government (FG) rose by six percent, year-on-year (YoY) to N1.46 trillion in the first quarter of the year (Q1’2020) from N1.13 trillion in the corresponding period of last year.

The increase in deficit spending was in spite eight percent, YoY,  increase in oil revenue and 5.1 percent (YoY) increase in Federally Collected revenue during the period.

The Central Bank of Nigeria (CBN) disclosed this in its Quarterly Economic Report for Q1’2020 released yesterday.

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The report showed that the FG recorded 23.5 percent, YoY decline in revenue to N864.9 billion in Q1’2020 from N1.13 trillion in the corresponding period of 2019. But it fell by 39 percent, Quarter-on-Quarter (Qo)  when compared with the retained revenue of N1.41 trillion recorded in Q4’2019.

The report also showed that the FG recorded 7.5  percent, YoY decline in expenditure to N2.327 trillion  in Q1’2020 from N2.513 trillion  in the corresponding period of 2019. But it fell by 7.1 percent, Quarter-on-Quarter (Qo)  when compared with the expenditure  of N2.67 trillion  recorded in Q4’2019.

Consequently, the FG recorded deficit spending rose by six percent, year-on-year (YoY) to N1.46 trillion in the first quarter of the year (Q1’2020) from N1.13 trillion in the corresponding period of last year. But it dropped  by 21 percent, QoQ when compared with the deficit spending of  N1.21 trillion recorded in Q4’2020.

The report stated: “ Provisional data indicated that the Federal Government retained revenue for the first quarter of 2020 amounted to N864.88 billion.

“This was below both the quarterly budget and the receipt in the preceding quarter by 58.9 per cent and 39.0 per cent, respectively. Of the total revenue, Federation Account accounted for 84.4 per cent, while Federal Government Independent Revenue, VAT, Exchange Gain, and Non-oil Excess accounted for 9.5 per cent, 5.1 per cent, 1.0 per cent, and 0.04 per cent, respectively

“At N2.3 trillion, the estimated Federal Government expenditure for the first quarter of 2020 was below the quarterly budget estimate of N2.65 trillion  by 12.1 per cent. It also fell by 11.4 per cent, compared with the level in the preceding quarter. A breakdown of the total expenditure, showed that the recurrent component accounted for 75.5 per cent, while capital and statutory transfers accounted for 20.3 per cent and 4.2 per cent, respectively.

“ A further breakdown of the recurrent expenditure showed that the non-debt component accounted for 72.1 per cent, while debt service payments was 27.9 per cent.

Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N1.46 trillion, compared with the proportionate quarterly budget deficit of N543.80 billion.”

The CBN report also showed the Federally Collected revenue rose by 5.1 percent, YoY, to N2.57 trillion in Q1’2020 from N2.4 trillion  In Q1’2019. But it dropped by 4.8 percent, QoQ, when compared with the N2.655 trillion recorded in Q4’2019.

The YoY increase in Federally Collected revenue was driven by 7.7 percent increase in Oil revenue to N1.523 trillion in Q1’2020 from N1.414 trillion  in Q1’19. Oil revenue however fell 4.8 percent QoQ when compared with N1.564 trillion  recorded in Q4’19.

Similarly, Non-Oil revenue rose 1.5 percent, YoY, to N1 trillion in Q1’2020 from N988 billion in Q1’19 but fell by eight percent, QoQ, when compared with N1.09 trillion recorded as Non-Oil revenue in Q4’19

The report stated: “At N2.527 trillion, Federally-collected revenue, in the first quarter of 2020, was lower than the quarterly budget estimate of N3.947 trillion  by 36.0 per cent.

“Similarly, it fell below the receipt in the preceding quarter by 4.8 percent. The decline in federally-collected revenue (gross), relative to the quarterly budget estimate, was attributed to shortfalls in receipt from both oil and non-oil revenue components during the review period

“Gross oil receipt, at N1,523.03 billion or 60.3 percent of the total revenue, was below the quarterly budget estimate and the receipt in the preceding quarter by 31.2 per cent and 2.6 percent, respectively. The decline in oil revenue, relative to the quarterly budget estimate, was due to shortfall in receipt from PPT and royalties.

“Non-oil revenue (gross), at N1.004 trillion or 39.7 percent of total revenue, fell below the quarterly budget estimate of N1.733  trillion by 42.1 percent. It also fell below the level in the preceding quarter by 8.0 percent. The lower non-oil revenue, relative to the quarterly budget estimate, was due to the decline in receipt from VAT and corporate tax “

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