KEY POINTS
- Weaker oil-related inflows drove a N590 billion drop in federation revenue in November
- NUPRC remittances fell sharply, outweighing gains from NNPC and oil taxes
- Lower deductions softened the impact, but funds shared by governments still declined month on month
Nigeria’s public finances came under renewed strain in November as weaker oil inflows pulled down total revenue shared by the three tiers of government, offsetting gains from the national oil company and highlighting the continued fragility of petroleum earnings.
Figures released by the Office of the Accountant General of the Federation show that total collections into the federation account fell to N2.34 trillion in November, from N2.93 trillion in October. Much of the N590 billion month-on-month decline was driven by lower remittances tied directly or indirectly to the oil sector, which remains the backbone of government revenue.
Receipts from the Nigerian Upstream Petroleum Regulatory Commission dropped sharply to N660.04 billion in November, compared with N873.1 billion a month earlier, reflecting weaker upstream performance and lower collections from industry operators.
Oil revenue collected by the Federal Inland Revenue Service moved in the opposite direction, rising to N407.57 billion from N315.64 billion in October, offering some relief but not enough to reverse the broader downturn in petroleum-linked inflows.
Oil slump weighs on federation account
The Nigerian National Petroleum Company recorded an improvement in its contribution, transferring N44.92 billion to the federation account in November, up from N14.72 billion in the previous month. Even so, the increase was modest relative to the overall fall in oil-related revenue streams.
From gross oil receipts during the month, N49.76 billion was channelled to the midstream and downstream gas infrastructure fund as penalties for gas flaring, further reducing the net amount available for distribution.
As a result, net revenue available to the federation declined to N2.29 trillion in November from N2.87 trillion in October, underlining the sensitivity of government finances to shifts in oil earnings, even as authorities push to broaden non-oil revenue.
Beyond oil, other income lines also weakened. Non-oil taxes collected by the Federal Inland Revenue Service fell to N337.22 billion from N591.15 billion, while receipts from the Nigeria Customs Service declined to N287.17 billion from N370.28 billion. Value-added tax collections eased to N563.04 billion from N719.82 billion, and proceeds from the electronic money transfer levy slipped to N43.4 billion from N49.86 billion.
On the expenditure side, deductions from the federation account fell sharply, providing partial cushioning against the revenue slump. Total deductions dropped to N365.1 billion in November from N780.45 billion in October, driven by lower savings and reduced costs of revenue collection.
Savings set aside from the federation account fell to N200 billion from N300 billion, while the cost of collection by agencies including the tax authority, customs service and the upstream regulator declined to N84.25 billion from N115.27 billion.
Transfers to the North-East Development Commission eased to N16.21 billion from N20.73 billion. Deductions related to 13 percent derivation refunds on subsidy, priority projects and the police trust fund remained unchanged at N18.16 billion.
At the same time, deductions linked to 13 percent derivation for NNPC management fees and the frontier exploration fund dropped sharply to N2.87 billion from N21.47 billion. The share of non-oil revenue allocated to the Revenue Mobilisation Allocation and Fiscal Commission rose to N6.15 billion, alongside N37.45 billion deducted as arrears.
After all adjustments, the amount available for sharing among the federal, state and local governments fell to N1.92 trillion in November, down from N2.09 trillion in October, reinforcing concerns over the volatility of Nigeria’s oil-dependent revenue base.
