17 January 2014, Abuja – The tumbling prices of oil continued to take its toll on the country’s monthly revenue collection as gross receipts for December further dropped to N490.03 billion compared to N500.07 billion the previous month.
Also, the sum of N15.63 billion was on Friday deducted from the excess crude account (ECA) to augment revenue shortfall for the month, leaving its balance at $2.45 billion from about $3.1 billion last month.
This came on the same day JP Morgan said it would assess Nigeria’s suitability to remain in a key emerging currency bond index because of a lack of liquidity in the African country’s forex and bond markets.
The reality of the ensuing fiscal crisis became even more glaring as unlike in the previous months, no provision was made for the subsidy re-investment programme (SURE-P) by FAAC yesterday. Previously, the sum of N35 billion had been distributed monthly to the three tiers of government.
The mineral revenue in the period under review declined to N381.58 billion compared to N383.14 billion while the non- mineral component also fell to N107.79 billion from N115.16 billion in November.
However, revenue from value added tax (VAT) increased by N12.82 billion to N73.46 billion compared to N60.63 billion in November.
Notwithstanding, a total distributable revenue amounting to N580.37 billion was shared yesterday among the three tiers of government for the month of December. This was lower than the N628.77 billion shared the previous month.
Addressing journalists in Abuja after the monthly meeting of the Federation Accounts Allocation Committee (FAAC), Minister of State for Finance, Alhaji Bashir Yuguda blamed the N10.04 billion drop in gross revenue in December on the drop in crude oil prices which slashed revenue from 87.8 million in October to $77.5 million in November.
According to him, that had resulted in $62.8 million loss in revenue as well as 52 per cent loss in production volume and 31 per cent price drop-all culminating in total revenue loss from the Liquefied Petroleum Gas (LPG) and Natural Gas Liquids (NGL).
The minister added that the persistence of Force Majeure declared by Shell since June, 2014 as well as shut down and shut in of trunks and pipelines at various terminals also had negative impact on overall revenue receipts in December.
He said revenue performance particular the non-oil receipts was further worsened by the fact that the timeline for payment of taxes by many companies was yet to fall due.
Explaining the zero allocation to SURE-P, Yuguda said: “We all know the prices of crude are falling and that’s why you see that zero allocation. We’ve been telling Nigerians to brace up; we’ve come up with measures, we’ve been telling Nigerians that from the month of November, we would start seeing the effect of the falling oil prices. And that’s what we are seeing now.”
Also speaking to journalists at the FAAC meeting, Chairman, Forum of Finance Commissioners, Mr. Timothy Odah said the current situation portends a clarion call for individuals and government to tighten their belt and for economic diversification.
He said: “I think it is good for Nigeria provided that with time it (oil price) will come up because this time around, we should make our budgets-from local governments up to the federal government-rating the country as a non oil nation. That will help us such that anything we have rather than being a shock, it will be a surprise. That’s what we have to learn. It is because we depended so much on oil.”
However, from the net statutory allocation distribution for the month, the Federal Government received the sum of N220.48 billion while the states shared N111.83 billion as well as N86.21 for the local governments.
The sum of N47.22 billion was shared among the oil and gas producing regions under the derivation principle.
For VAT, the federal government got N10.57 billion while the states shared N35.26 billion, leaving the local governments with N24.68 billion.
– This Day