The Federal Government of Nigeria missed its revenue targets for the month of October and this may result in more borrowing.
According to the Central Bank of Nigeria (CBN) in its October 2019 Economic Report, the estimated federally collected revenue of N894.09 billion fell short of the monthly budget estimate of N1.2 trillion. The shortage of N351.98 billion represents a 28.2% shortfall.
The N894.09 billion recorded in October is the third consecutive drop in federally collected revenue, with September and August figures standing at N902.1 billion and N925.7 billion respectively.
The Central Bank attributed the failure to meet the federally collected revenue target to shortfall in both oil and non-oil revenue, which shows that the country’s revenue challenges are still staring it in the face.
Oil revenue breakdown
The apex bank disclosed that oil receipts, at N577.30 billion or 64.6% of total revenue, were below the monthly budget estimate of N798.83 billion by 27.7%.
However, it exceeded the receipt of N467.58 billion in the preceding month by 23.5%.
Crude oil and gas exports, domestic crude oil/gas sales and other revenue streams experienced significant increase in October.
The N577.30 billion recorded in October is the highest the country has recorded in 2019.
Additionally, N950 million was distributed in the month as Exchange Gain, with the Federal, State and Local governments receiving N440 million, N220 million and N170 million. Overall, the total allocation to the three tiers of government in October 2019 amounted to N673.01 billion, which was below the preceding month’s budget estimate of N1.091 trillion and monthly allocation of N676.9 billion.
The Federal Government spent N695.89 billion in October, with the fiscal transactions showing that recurrent and capital expenditure constituted 57% and 37.3% of the total expenditure, respectively; transfers gulped 5.7% of the recurrent expenditure; non-debt obligation was 76.8% while debt service payments accounted for 23.2% of the total.
Implication: The failure of the Federal Government to meet its budgeted revenue targets implies that government borrowing might continue to surge in 2020, as government will seek to fund its activities despite a shortfall in revenue.