The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, on Monday, painted a gloomy picture of the economic downturn bedevilling the country in the 2022 fiscal year, especially through the oil revenue regarded as the mainstay of the Nigerian economy.
Speaking on the oil revenue performance (January-April) before the House Committee on Finance chaired by Hon. Abiodun James Faleke in Abuja, the Minister said: “from the gross oil and gas Federation revenue for the full year 2022 was projected at N9.37 trillion.
Meanwhile, the Debt Management Office (DMO) disclosed that Nigeria’s debt profile as of December 2021 stood at N39.55 trillion.
According to the document presented to the Committee, from the N6.449 trillion budgeted non-oil revenue (taxes) the sum of N1.991 trillion actual was realised against the pro-rata of N2.150 trillion before deductions.
From the N1.52 trillion available for distribution from the main pool – Federation Account, Federal Government received N802.50 billion while the State Governments received N407.04 billion and N313.81 billion respectively.
Federal, State and Local Governments received N107.67 billion, N358.90 billion and N251.23 billion respectively from the VAT pool account.
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She said: “As of April 30, 2022, N1.23 trillion was realised out of the prorata projection of N3.12 trillion, representing a mere 39 per cent performance.
“Despite higher oil prices, oil revenue underperformed due to significant oil production shortfalls for two main reasons: oil production shut-ins resulting from pipeline vandalism and crude oil theft. There is also a high petrol subsidy cost due to higher landing costs of imported products.
“The non-oil taxes trailed targets marginally, with an average performance of 92.6 per cent.”
She, however, observed that the “revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipeline vandalism.
“There is also seasonality to some of the non-oil taxes, which means that we expect to collect significantly more in the second half of the year.
“The improved revenue collection should also moderate the Debt Service to Revenue ratio, which is currently above our target level.”
According to the Minister, the actual average crude oil on rice is higher than the budget benchmark price of $73 per barrel.
However, higher oil price is offset by lower oil output, which as of April 2022 stood at an average of 1.32mbpd.
“NNPC attributes the fall in oil production to the high incidence of crude oil theft and pipeline vandalism.
“Exchange rate, inflation and GDP growth varied adversely from the targets. Growth is however expected to accelerate given efforts to contain structural issues impacting adversely on the cost of doing business,” she assured.
While giving update in the revenue performance, the document showed that: “As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49 per cent of the prorata target of N3.32 trillion.
“The FGN share of oil revenues was N285.38 billion (representing 39 per cent performance), while non-oil tax revenues totalled N632.56 billion -a performance of 84 per cent. CIT and VAT collections were N298.83 billion and N102.97 billion, representing 99 per cent and 98 per cent of their respective targets.
“Customs collections (made up of import duties, excise and fees, as well as federation account special levies) trailed target by N76.77 billion (25.42 per cent).
“Other revenues amounted to N664.64 billion, of which Independent revenue was N394.09 billion.”
On the expenditure side, the documents showed that: “The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a prorata spending target of N5.77 at end of April.
“The actual spending as of April 31st was N4.72 trillion. Of this amount, N1.94 trillion was for debt service, and N1.26 trillion for Personnel cost, including Pensions. As of April, N773.63 billion has been spent on capital expenditure.”
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