Lagos — Nigeria earned N5.537 trillion from the oil and gas sector in 2019, dropping slightly by 0.16 per cent from N5.546 trillion recorded in 2018, according to latest data released by the Central Bank of Nigeria, CBN.
According to data obtained from the CBN’s Economic Report for the Fourth Quarter of 2019, gross oil revenue dipped by 3.52 per cent to N1.414 trillion in the first quarter of 2019, compared to N1.465 trillion recorded in the fourth quarter of 2018, while it dipped further by 13.8 per cent to N1.219 trillion in the second quarter.
In the third quarter of 2019, gross oil revenue rose by 9.93 per cent to N1.34 trillion compared to oil revenue in the second quarter; while it rose further by 16.72 per cent to N1.564 trillion in the fourth quarter of 2019.
In 2018, the country recorded gross oil revenue of N1.288 trillion, N1.398 trillion, N1.394 trillion and N1.465 trillion in the first, second, third and fourth quarter respectively.
Giving a breakdown of the components of the country’s gross oil earnings in 2018, the CBN report noted that revenue from crude oil and gas export accounted for 7.2 per cent of total oil revenue with N398.64 billion; while earnings from Petroleum Profit Tax/Royalties stood at N3.529 trillion, representing 63.75 per cent of total oil earnings.
Other petroleum revenue sources fetched the country N1.608 trillion in the year under review, representing 29.06 per cent of total oil revenue in 2019.
Furthermore, in its projection for 2020, the CBN disclosed that the outlook for Nigeria’s economy for the first quarter of 2020 is cautiously optimistic, amidst weakening global demand and inflationary pressures stemming from the increase in Value Added Tax, VAT.
According to the CBN, these developments are attributed to slowed global recovery, uncertainty related to the United States’ 2020 presidential elections and a sustained balance of payments deficit.
The CBN added that the outlook for the external sector may remain challenging due to the likely decline in domestic oil production as well as decline in foreign direct investments, FDI.
However, the CBN noted that a modest positive performance remained feasible, which it claimed would be supported by exchange rate stability, a ‘phase-one’ US-China trade deal, and CBN’s initiatives towards the diversification of the economy by increasing its export base in the external sector.
The CBN said, “The fiscal space was expected to be enhanced on the back of increased government revenue occasioned by the recently passed Finance Bill, increase in VAT and crude oil prices, were expected to average at $61 per barrel in 2020, above the proposed budget benchmark of $57 per barrel. In addition, the pace of capital releases was expected to have a positive impact on the economy.
“However, depressed global oil demand, output cuts imposed by OPEC and rising debt service obligation were major threats to the economy.”