The Federal Government earned about N522.1billion from Petroleum Profit Tax, PPT, royalties and domestic crude oil and gas sales in May 2013, according to data released by the Central Bank of Nigeria, CBN.
The amount represents 4.6 per cent of the N11.34 trillion gross federally-collectible revenue projected by the Federal Government in the 2013 Budget.
The Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, had projected gross revenue collection of up to N11.34 trillion in the budget.
Giving a breakdown of the revenues collected, the CBN in its Economic Report for May 2013, said the Federal Government earned N334.3 billion from PPT and Royalties, and N187.8 billion from domestic crude oil and gas sales.
Specifically, PPT/Royalties appreciated by 9.46 per cent from N305.4 billion in April, while domestic crude oil and gas sales appreciated by 40.78 per cent to N187.8 billion from N133.4 billion in April.
However, government’s earnings from crude oil and gas sales dipped by 31.6 per cent from N173.6 billion in April to N118.7 billion in May.
Cumulatively, total oil revenue appreciated by 4.44 per cent to N648.6 billion from N621 billion in April. This represents 5.72 per cent of the N11.34 trillion projected in the budget.
The report further indicated that gross oil receipts accounted for 78.5 per cent of the total revenue for the month in review, adding that the amount was above the provisional monthly budget estimate and the sum realised in March and April by 0.6 and 4.5 per cent, respectively.
According to the CBN, total federally-collected revenue in May was estimated at N826.36 billion, stating that this was below the provisional monthly budget estimate by 12.6 per cent, but exceeded the receipt in the preceding month by 2.5 per cent.
Analysts concerned about dependence on oil
Nigeria’s over-dependence on crude oil revenues, remains a big source of concern for analysts at the Cowry Assets Management Limited.
They forecast that Nigeria’s foreign exchange reserves will remain under pressure from declining crude oil production, and likely high demand or foreign exchange by end users in the second half of 2013.
In Cowry’s 2013 Half Year Review and Outlook, made available to Vanguard, non-oil sector remained the main contributor to growth having expanded by 7.89 per cent.
They said: “Nigerian external sector was impacted by a number of negative conditions towards the end of the first half of 2013, such as oil price volatility amid weak international demand for crude oil, Nigeria’s declining crude oil production amid oil bunkering activities as well as growing demand for foreign exchange by end users.
“Nigeria’s exports are highly concentrated on crude oil which accounts for about 95 per cent of total exports. In the same vein, Nigeria’s budgeted revenue is largely dependent on petro-dollars.”
On the outlook for the remaining second half of the year, Cowry said: “We expect the foreign exchange reserves to remain under pressure from declining crude oil production and likely high demand or foreign exchange by end users in the second half of 2013.
“Recent divestments by international oil companies, coinciding with reduction in dollar sales by oil companies to banks, are expected to retain pressure on the naira at the interbank market.”
Continuing, the CBN attributed the rise in oil receipts, relative to budget estimate, to the increase in receipts from Petroleum Profit Tax, Royalties, and domestic crude oil and gas sales in the review period.
“Provisional data indicated that foreign exchange inflow and outflow through the CBN in May 2013 was US$3.10 billion and US$3.23 billion, respectively. This resulted in a net outflow of US$0.14 billion, higher than the net outflow of US$0.08 billion recorded in the preceding month, but in contrast to the net inflow of US$0.37 billion in the corresponding period of 2012.
“Relative to the levels in the preceding month and the corresponding period of 2012, inflow fell by 4.4 per cent and 14.7 per cent, respectively. The decrease in inflow, relative to the preceding month, was attributed largely to the 5.3 per cent fall in oil receipts.
“At US$3.0 billion, oil sector receipts fell by 5.3 per cent below the level in the preceding month and accounted for 22.1 per cent of the total inflow,” the CBN said.
Information from Vanguard was used in this report.