April 5, 2023/FBNQuest

The most recent monthly economic report published by the CBN shows that the gross federally collected revenue decreased by -16% m/m to NGN991bn in Nov ’22. It also fell short of the pro-rata monthly budget benchmark of c.NGN1.6trn. However, on a y/y basis, November gross revenue was +31% higher than collections in the year-earlier period. On a cumulative basis, the gross receipts for January to November ’22 totalled about NGN10.6trn, implying an increase of 29% y/y.

The m/m decline in gross receipts was due to a -53% m/m reduction in oil revenues to NGN252bn. It was also lower than the monthly pro-rata benchmark of NGN792bn.

The underperformance of oil revenue in November was driven by petroleum profit tax (PPT) & royalties which fell by -54% m/m to NGN245bn.

In line with recent trends, receipts were not received from crude oil and gas exports in Nov ’22. In contrast to oil’s weak performance, non-oil revenue collections increased by 16% m/m and 41% y/y to NGN739bn. However, it was still slightly lower than the monthly pro-rata benchmark of NGN789bn.

All three revenue segments within the non-oil sector increased m/m. The major contributor was companies’ income tax (CIT) which rose by 39% m/m to NGN212bn and was +28% higher than the pro-rata monthly budget.  

Revenue from other non-oil sources, such as customs and excise duties, and value-added-tax (VAT) increased by 19% and 12% m/m to NGN158bn and NGN229bn respectively.

According to the data, the total balance distributed among the three tiers of government increased by 5% m/m to NGN737bn but was significantly lower than the monthly budget benchmark of NGN1.2trn.

The underperformance of the total shared revenue relative to the pro-rata monthly budget continues to reflect the government’s precarious fiscal position.