Report: Non-oil Earnings Lifted FG’s Revenue by 28% in April

*Govt rakes in N1.1trn

James Emejo in Abuja

Significant growth in non-oil tax receipts in April, prompted by the gradual return of business activities to pre-COVID-19 levels, led to a 28.2 per cent increase in the federal government’s revenue, relative to the preceding month, raising the government’s revenue to N1.106 trillion, the Central Bank of Nigeria (CBN) has revealed.

The CBN stated this in its monthly economic report for April posted on its website.

According to the report, at N1.106 trillion, the federation receipt in April 2021 outpaced both the budget benchmark and collections in March 2021 by 28.2 per cent and 7.9 per cent, respectively.

While oil revenue accounted for 35.5 per cent (or N392.91 billion) of total receipts in the period, non-oil revenue contributed 64.5 per cent (or N712.87 billion).

The report attributed the diminished share of oil to the meagre remittance of N3.79 billion from crude oil and gas exports, compared with N52.50 billion in the 2021 budget estimate.
This reflected the exacerbating incidence of cost ‘under-recovery,’ as reported by the Nigerian National Petroleum Corporation (NNPC), it stated.

The report said, “In addition, the significant decline in domestic crude oil and gas sales, also contributed to the meagre oil receipt during the period. The strong performance of non-oil revenue in April 2021 reflected the maturing benefits of the Strategic Revenue Generation Initiative (SRGI) of the federal government, as contained in the 2019 and 2020 Finance Acts.
“The contribution of non-oil revenue was driven, majorly, by higher earnings from Corporate Income Tax (CIT) and Value Added Tax (VAT).”

However, the report disclosed that the federal government’s total outstanding contractual liabilities increased to N28.98 trillion at the end March 2021, indicating an increase of 15.8 per cent relative to March 2020 and 2.5 per cent compared to December 2020.
This was as debt service obligations amounted to N1.03 trillion as at first quarter of 2021 compared with N779.73 billion and N461.98 billion in the first and fourth quarters of 2020, respectively.

The increase in the federal government’s liability was propelled by the fiscal policy drive to support economic recovery, reduce infrastructural deficit and fund COVID-19 mitigation programmes.

The CBN stated that the significant rise in debt service was due, largely, to the interest payments on additional FGN bonds, promissory notes and the redemption of the $500 million Eurobonds, which matured in January 2021.

The retained revenue of the federal government stood at N409.31 billion or 38.5 per cent below target.

Similarly, the provisional aggregate expenditure of the federal government stood at N559.67 billion, or 50.6 per cent below the budget benchmark and 59.4 per cent short of the level in March.

Consequently, the fiscal operations of the FGN in April 2021 contracted by 67.8 per cent, relative to the budget estimate.

The CBN, however, stated that output growth trajectory remained largely positive, looking ahead, following optimism of an accelerated COVID-19 vaccination and expected favourable crude oil prices.

It stated, “Growth will continue to be supported by the implementation of the Economic Sustainability Plan (ESP) and the accommodative monetary stance of the Bank.
“The moderation in food supply shocks, associated with the improved harvests, as rainy season kicks in, will continue to have favourable knock-on effects on inflationary pressures and moderate headline index, going forward.”

The CBN predicted that the external sector outlook remained stable and would be supported by the on-going policy on diaspora remittances.

It added, however, that despite the confidence, downside risks to the outlook persist.
The apex bank stated, “Concerns over the emerging third wave of the COVID-19 pandemic in Europe and Asia could depress global supply chain and crude oil demand.

“In addition, external vulnerability, insecurity across the country, subsisting infrastructure gap, and constrained fiscal space, may weigh negatively on the growth prospects.”