The slump in the global prices of crude oil resulted in a drop of N265.28bn in the revenue generated by Nigeria in the fourth quarter of 2014 when compared to what the country garnered in the preceding quarter.
Oil prices fell from over $100 per barrel early last year to as low as $40 per barrel in December 2014. Over 70 per cent of Nigeria’s gross revenue comes from the sale of crude oil.
Any fall or increase in the price or production of the commodity usually has some effect on the revenue earned by the Federal Government.
Data obtained on Friday from the Office of the Accountant-General of the Federation for the fourth quarter 2014, as analysed by the Central Bank of Nigeria, showed that Nigeria’s gross oil revenue fell by 15.49 per cent.
Further findings revealed that as a result of the plunge in crude oil prices and its attendant effect on Nigeria’s earnings, the country’s gross oil revenue was unable to meet 19.17 per cent of its budgetary target.
The OAGF, in a report released by the CBN, stated, “At N1.448tn, gross oil revenue declined respectively by N265.28bn or 15.49 per cent and N90.56bn or 5.89 per cent, below the levels in the third quarter of 2014 and the corresponding quarter of 2013.
“Oil revenue accounted for 72.4 per cent of gross revenue during the review quarter, while the balance of 27.6 per cent was from non-oil sources. Gross oil revenue met 80.83 per cent of budgetary target of N1.791tn.”
As a result of the global crash in oil prices, the country’s gross federally-collected revenue during the period under review also fell by N480.74bn or 19.38 per cent. The amount of revenue collected, according to the report, was N1.999tn.
The report said, “Gross federally-collected revenue amounted to N1.999tn during the fourth quarter of 2014, representing decreases of N480.74bn or 19.38 per cent and N57.61bn or 2.8 per cent, below the levels in the preceding quarter and corresponding quarter of 2013, respectively. The revenue collections met 81.8 per cent budget performance.”
The report also indicated that the federally-collected revenue for the third quarter of 2014 was N2.057tn, but this fell by almost half of a trillion naira in the fourth quarter.
Oil producers in Nigeria and experts in the sector have stated that Nigeria may lose over N2tn in 2015 alone, if the fall in the crude oil prices persists.
The Oil Producers Trade Section, a 22-member group comprising local and international firms, that form 96 per cent of the total oil and gas production in the country, stated that the fall in crude oil prices had exposed Nigeria to a severe revenue squeeze.
The group on Thursday stated that the fall in the global crude oil prices might result in a revenue decline of about $10bn (about N2.2tn) to the Nigerian economy this year.
The Chairman, OPTS, Mrs. Elizabeth Proust, said estimates by the group showed that at an average price of $53 per barrel for crude oil, Nigeria’s revenue might decline by $10bn this year.
She said, “There is no doubt that the crude oil prices that we are experiencing today are having a severe adverse impact on the revenues of both producers and host governments globally.
“Unfortunately, Nigeria is not immune to this revenue squeeze. We estimate that if crude oil price averages $53 per barrel in 2015, compared to $77.5 in 2014, the Federal Government of Nigeria’s oil and gas revenue will decline by about $10bn this year, or a gut reaching 30 per cent.”
The Chairman, Society of Exploration Geophysicist, Nigeria, Prof. Charles Ofoegbu, told our correspondent that the oil boom era had come and gone, stressing that it was high time that the Federal Government diversified the Nigerian economy.
He said, “The oil boom era has come and gone. With the drop in price of oil, government is beginning to realise that we must go back to our roots. We must go back and begin to look at the solid minerals sub-sector. And then of course, government should put in place the enabling environment to encourage mining. As of now, not much has been done but there has been a lot of meetings and pronouncements.
“But we want to see it happening; we want to see all those dead mining sites in Jos, Taraba and others being re-opened. The illegal mining going on now exposes people to all kinds of danger. I want us to formalise the mining sector and even know what volume is exported because at the moment this government cannot tell you what volume of any of our minerals is taken out of this country. This is done semi-illegally.”
Source: Business News