Non-Oil Soars 67% to N4tn, Says CBN

According to the Central Bank of Nigeria’s third-quarter report, the Federal Government has recorded a significant increase of 67% in its non-oil revenue, reaching approximately N4 trillion quarter-on-quarter. The report also highlighted a 50.1% growth in the Federal Government’s overall collected revenue during the third quarter of 2023.

The key points from the report are as follows:

1. Total Revenue:
   • The Federation Account’s receipts rose to N4.79 trillion in the third quarter, marking a 50.1% increase from the previous quarter.
   • Despite the growth, the revenue fell short of the budget benchmark by 9.5%.
2. Revenue Composition:
   • Non-oil revenue continued to be the primary contributor, accounting for 83.0% of the total revenue.
   • Oil revenue constituted the remaining 17.0%.
3. Oil Revenue:
   • Oil revenue, at N814.23 billion, increased by 0.6% compared to the preceding quarter.
   • However, it fell significantly below the target of N2,410.89 billion by 66.2%.
4. Non-Oil Revenue:
   • Non-oil revenue, amounting to N3,977.16 billion, surged by 66.9% from the previous quarter.
   • It exceeded the target by 38.0%, indicating robust collections in Company Income Tax (CIT), Customs and Excise Duties, and Value-Added Tax (VAT).
5. Contributing Factors:
   • The improved performance was attributed to higher receipts from CIT, Customs and Excise Duties, VAT, Production Sharing Contract, and the 2023 interim dividend declared by the Nigerian National Petroleum Company Limited (NNPCL).
   • Economic activities, seasonality in tax returns, particularly CIT, and enhanced efficiency in tax administration were cited as drivers of the revenue growth.
6. Policy Changes:
   • The removal of fuel subsidy and the unification of foreign exchange policies by the government were mentioned as factors contributing to increased accrued revenue to the federation account.
   • However, these policy changes have also led to inflationary pressures on citizens.
7. Concerns Raised by the World Bank:
   • Despite the significant increase in revenue, the World Bank raised concerns about the lack of transparency from the Nigeria National Petroleum Corporation Limited (NNPC) regarding financial gains from fuel subsidy removal and remittances to the federation account.

The report reflects the government’s efforts to diversify revenue sources and reduce reliance on oil revenue, contributing to improved economic performance. However, concerns about transparency and the impact of policy changes on citizens’ cost of living remain notable considerations.