At N947bn, Nigeria’s Non-oil Revenue Drops By 17%

No room for arbitrage in FX market, CBN insists

James Emejo in Abuja and Nume Ekeghe in Lagos

At a total of N946.90 billion, the federal government’s non-oil revenue was below the proportionate quarterly budget estimate of N1.401 trillion, the Central Bank of Nigeria (CBN) has disclosed.

The CBN disclosed this in its Fourth Quarter Economic Report for 2018, posted on its website yesterday.

This is coming as the apex bank yesterday insisted that there was no room for arbitrage opportunities in the foreign exchange (FX) market.

The non-oil revenue was lower than the level in the preceding quarter by 17 per cent.

The lower non-oil revenue relative to the proportionate quarterly budget estimate was due to the shortfalls in receipts from Federal Government Independent Revenue and Value Added Tax (VAT) in the review period.

However, at N2.412 trillion, federally-collected revenue in the fourth quarter of 2018, was lower than the proportionate quarterly budget estimate of N3.321 trillion by 27.4 per cent. It also, fell below the receipts in the preceding quarter by 4.8 per cent.

The decline in federally-collected revenue (gross) relative to the proportionate quarterly budget estimate was attributed to the shortfall in receipts from both oil and non-oil revenue components during the review period.

In addition, gross oil receipt, at N1.465 trillion or 60.7 per cent of the total revenue, was below the proportionate quarterly budget estimate by 23.7 per cent, but higher than receipts in the third quarter of 2018 by 5.1 per cent.

“Despite the increase in crude oil price, oil revenue declined relative to the proportionate budget owing to shortfalls in crude oil production and exports, arising from maintenance at various NNPC terminals,” it added.

Also, aggregate credit to the domestic economy, on quarter-on-quarter basis, rose by 4.5 per cent to N27.594 trillion at the end of December 2018, compared with the increase of 3.3 per cent at the end of the preceding quarter.

The development reflected, wholly, the 41.5 per cent increase in net claims on the federal government.

On quarter-on-quarter basis, banking system’s credit to the private sector fell by 1.1 per cent to N22.72 trillion at the end of December 2018, in contrast to the increase of 3.1 per cent at the end of the preceding quarter.

The development was as a result of the 2.1 per cent decline in claims on core private sector.

Over the level at the end of December 2017, banking system’s credit to the private sector grew by two per cent, compared with the three per cent growth at the end of September 2018

This was due to the two per cent and 0.6 per cent increase in claims on core private sector and claims on state and local government, respectively.

The report also showed that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.86 mbd or 171.12 million barrels (mb) during the review quarter. This represented an increase of 2.2 per cent, compared with 1.82 mbd or 167.44 million barrels at the end of the third quarter of 2018. The estimated increase in production was attributed, largely, to gains from sustained partnership with government and stakeholders in the Niger-Delta region and the security measures put in place to forestall production disruption and losses through pipeline vandalism.

“Crude oil export averaged 1.41 mbd or 129.7 mb, representing an increase of 2.9 per cent above 1.37 mbd or 126.0 mb in the preceding quarter.

“Allocation of crude oil for domestic consumption was 0.45 mbd or 41.4 million barrels during the period under review.

“The average spot price of Nigeria’s reference crude oil, the Bonny Light, fell to $69.89 per barrel in the fourth quarter 2018, from $76.50 per barrel in the preceding quarter.

“This represented quarter-on-quarter decrease of 8.6 per cent. The fall in oil price was attributed mainly, to supply glut in the global market, particularly rising US crude oil inventories,” the report added.

No Room for Arbitrage in FX Market, CBN Insists

Meanwhile, the CBN yesterday insisted that there was no room for arbitrage opportunities in the foreign exchange (FX) market.

The bank also assured Nigerians that it would continue to act in the best interest of the country.

In addition, the banking sector regulator reiterated that it remains focused on its core mandate of sustaining the stability in the foreign exchange (FX) market.

The bank stated this in a statement, while reacting to a news report on alleged FX racketeering in the Bank, saying the allegation was unfounded.

The statement explained: “The management of the CBN wishes to react to the report that faceless agents in Nigeria are exploiting the country’s multiple exchange rates to devastating effects and allegedly with the backing of regulators.

“As most financial observers have noted, the FX rates across various markets governed and regulated by the CBN, have been converging, leaving no room for arbitrage opportunities in Nigeria’s FX market. “For avoidance of doubt, the CBN will continue to act in the best interest of Nigeria and shall ensure it remains focused on its core mandate of sustaining the stability in the FX market,” it added.