February 24, 2023/FBNQuest Research

The CBN’s monthly economic report for October ’22 shows slight improvements in the federation’s gross receipts. Gross revenue increased by 7% m/m and 8% y/y to NGN1.2trn. However, the gross amount was lower than the pro-rata monthly budget benchmark of NGN1.6trn. The improved revenue outturn was driven by the robust performance of oil revenue which more than doubled m/m (+15% y/y) to NGN540bn, due to a significant rise in petroleum profit tax (PPT) and royalties receipts.

Revenue generated from PPT and royalties increased by 62% y/y (+103 m/m) to NGN536bn during the period and was slightly higher than the monthly benchmark of NGN531bn.

In line with the trend in recent months, there were no receipts from crude oil and gas exports.

Although oil revenues increased in October, on the whole, Nigeria did not profit greatly from the high level of crude oil prices in 2022. This is largely because of the country’s low oil production, which is related to security issues such as crude oil theft and pipeline vandalism.

In contrast to oil’s strong performance, non-oil revenue declined by -23% m/m to NGN638bn, and -19% lower than the monthly benchmark of NGN789bn.  

However, it still accounted for over 54% of the total revenue amount and increased by a paltry 3% y/y.

The major contributor to the m/m reduction in non-oil revenue was a -32% m/m decline in FGN independent revenue. Other major segments such as corporate tax and excise duties also declined by -27% m/m and -24% m/m respectively.

After deductions and transfers, and some additional revenue, mainly from excess non-oil sources, the balance left for distribution among the three tiers of government amounted to NGN700bn.

This was higher than the NGN673bn shared the previous month, but -44% below its monthly budget benchmark.