The Central Bank of Nigeria (CBN) has disclosed that the Federal Government experienced a remarkable 67% growth in its non-oil revenue, reaching approximately N4 trillion in the third quarter of 2023. The CBN's third-quarter economic report highlighted a significant uptick in the Federal Government's overall collected revenue, increasing by 50.1% during the same period.
According to the report, the total Federation Account receipt stood at N4.79 trillion, surpassing the figures from the previous quarter by 50.1%. However, it fell below the budget benchmark by 9.5%. The enhanced revenue performance was attributed to higher non-oil receipts but remained below the anticipated benchmark.
Non-oil revenue continued to play a dominant role, accounting for 83.0% of the total federation revenue, while oil revenue comprised the remaining 17.0%. Oil revenue, primarily driven by receipts from production sharing contracts and dividends from the Nigerian National Petroleum Company Limited (NNPCL), reached N814.23 billion, marking a 0.6% increase from the preceding quarter but falling short of the target by 66.2%.
On the other hand, non-oil revenue soared to N3,977.16 billion, reflecting a robust 66.9% growth compared to the previous quarter and exceeding the target by 38.0%. This surge was attributed to improved economic activities, seasonality in tax returns—particularly Company Income Tax (CIT)—and enhanced efficiency in tax administration.
The removal of fuel subsidy and the unification of foreign exchange policies were cited as factors contributing to the significant increase in accrued revenue to the federation account. However, despite the positive revenue trajectory, concerns have been raised about the lack of transparency in the financial gains from fuel subsidy removal and remittances to the federation account by the Nigeria National Petroleum Corporation Limited (NNPC), as noted by the World Bank.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, previously highlighted that the removal of fuel subsidy had raised monthly Federation Revenue to an average of N1 trillion over the last four months. The economic landscape and government revenue dynamics will continue to be closely monitored as the nation navigates fiscal policies and global economic trends. Stay tuned for further updates.
