From January through November of last year, the sale of crude brought in N586.71 billion for the federal government. The earnings fell 74.3% short of the period’s prorata target. As a result of increased divestments and crude theft, oil revenue performance has fallen short of expectations in recent years.
An increase in revenue from non-oil sources has more than made up for the decline in oil revenues. According to the Minister of Finance, Budget, and National Planning’s presentation of the 2022 budget performance, non-oil revenue reached N2.09 trillion during the course of the 11-month period. The amount was 23.3% higher than the budget’s set targets.
According to the minister, retained business income tax (CIT) revenue was N1.08 trillion while retained value-added tax (VAT) revenue was N295.2 billion. By 58.6 percent and 24.3 percent, respectively, both revenue sources performed a little better than the standard set by the budget.
The scorecard also revealed that the customs collections, which include import duties, excise, fees, and special levies, came in N15.42 billion over budget.
Additionally, it stated that “other revenues” totaled N3.72 trillion while “independent revenue” was N1.32 trillion for the government.
The Federal Government’s total retained revenue for the time period, according to The Guardian, was N6.4 trillion, or 87% of the prorata objective of N7.48 trillion.
Recent years have seen revenue results fall short of expectations, causing the government to borrow continuously to close the enormous budgetary imbalance. Loans from both local and international sources have helped to block some of the deficits that have surpassed expectations, with the Central Bank of Nigeria’s (CBN) overdrafts providing the main source of support.
The apex bank’s backlog of support has grown to N22.7 trillion from less than N1 trillion in 2015. The government will pay interest on the ways and means (W&M) facility for N1.8 trillion this year.
In a letter to the National Assembly, President Muhammadu Buhari requested that the facility be securitized and that a deal be made for an issuing of 9.0% bonds.
The agreement will save the government money servicing the loan and remove it from the CBN balance sheet, despite the fact that it is considered as inconsistent with W&M management style and the CBN Act.
The Executive’s request was rejected by the National Assembly because it wanted further information on the accumulating liabilities. The President encouraged MPs to urgently consider accepting the securitization plan at the signing of the 2023 Appropriation Law earlier this week in Abuja in order to allow the government to finish the process of transforming the debt into a long-term instrument.
The Federal Government plans to borrow an additional N8.8 trillion to supplement its lofty N10.49 trillion revenue projection in the recently adopted 2023 Appropriation Act. The amount is around N3.4 trillion more than the annualized retained earnings from the prior year (N7.1 trillion).
