KEY POINTS
- Nigeria’s net oil revenue for Q4 2024 fell 21% short of projections, totalling ₦3.34 trillion.
- The decline was driven by oil theft, weak investment, and large fiscal deductions tied to subsidies.
- Despite an 80% year-on-year rise in overall 2024 oil receipts, total revenue still missed the annual budget target by nearly ₦5 trillion.
Nigeria’s oil earnings fell sharply below expectations in the final quarter of 2024, with the Budget Office of the Federation reporting that net oil revenue stood at ₦3.34 trillion, a steep 21 per cent shortfall from the quarterly projection of ₦4.24 trillion.
According to the Office’s latest Q4 2024 Budget Implementation Report, the downturn underscores the continuing fragility of Africa’s largest crude producer, whose fiscal performance remains heavily tied to oil receipts despite efforts to expand non-oil income.
The report noted that the ₦3.34 trillion realised during the period was ₦896.57 billion below target and also represented a 16 per cent decline compared with the ₦3.99 trillion posted in the third quarter of the same year.
Still, the figure was 65 per cent higher than the ₦2.41 trillion recorded in the corresponding quarter of 2023, showing that while revenues improved year-on-year, they continue to trail budget expectations.
Decline linked to oil theft, weak investment, and fiscal deductions from subsidy policy
The Budget Office blamed the disappointing performance on a cocktail of challenges that have long plagued Nigeria’s petroleum sector, including oil theft, pipeline vandalism, and dwindling investment in exploration. High fiscal deductions linked to the government’s subsidy obligations also eroded potential revenue gains.
“The inflow was lower than the projected estimate due to production shortfalls and heavy fiscal deductions,” the Office said. “These factors continue to constrain the Federation Account inflows despite relatively stable global crude prices.”
The report further revealed that gross oil revenue totalled ₦3.9 trillion in Q4 2024 — about ₦1.09 trillion short of the quarterly target and down by 15 per cent from the ₦4.62 trillion generated in the third quarter. Yet, the figure was a significant improvement on the ₦1.89 trillion recorded in the same period of 2023, more than doubling the previous year’s returns.
A detailed breakdown showed mixed results across revenue components. Royalties on oil and gas exceeded projections by 36 per cent, while concessional rentals and miscellaneous income such as pipeline fees outperformed by 156 per cent and 118 per cent, respectively.
