Nigeria earned N5.54trn from oil, gas in 2019
…CBN to improve credit delivery to agricultural, SMEs, others-Report
By Anthony Okafor
Nigeria earned N5.536 trillion from the oil and gas sector in 2019, accounting for 54.2 per cent of total federally-collected revenue of N10.21 trillion recorded by the country in the same year, according to data released by the Central Bank of Nigeria, CBN.
The CBN, in its latest economic report obtained by iBrandTV Wednesday, shows that at N5.536 trillion, oil earnings appreciated by 2.71 per cent, compared to oil revenue of N5.39 trillion in the 2018 fiscal year.
The amount the country earned from the oil and gas sector represented 62.06 per cent of the 2019 budget estimate of N8.92 trillion.
Giving a breakdown of total oil earnings in the year, the CBN report stated that in the first and second quarters of 2019, oil revenue stood at N1.41 trillion and N1.219 trillion respectively, compared to N1.23 trillion and N1.29 trillion in the corresponding period in 2018 respectively.
In the third and fourth quarters of 2019, oil revenue stood at N1.34 trillion and N1.56 trillion respectively, compared to N1.4 trillion and N1.47 trillion in the same periods in 2018 respectively.
Giving a further breakdown of components of the country’s earnings from the oil sector, the CBN disclosed that crude oil and gas exports, at N398.64 billion, accounted for 0.07 per cent of total federally-collected revenue, while earnings from petroleum profit tax/royalties stood at N3.529 trillion, accounting for 63.75 per cent of total federally-collected revenue in 2019.
Other oil earnings, comprising education tax, customs special levies, federation and non federation and National Information Technology Development Fund (NITF); solid minerals and other mining revenue, stood at N1.609 trillion, representing 29.06 per cent of total earnings in 2019.
Economic outlook cautiously optimistic — CBN
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.
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.
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.
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.”
The CBN further stated that productivity in the real sector was expected to be supported by government spending on infrastructure and CBN interventions in growth-stimulating sectors.
It stated: “Specifically, the renewed focus of the CBN in improving credit delivery to the agricultural and manufacturing sub-sectors as well as Micro, Small and Medium Enterprises (MSMEs), would moderate unemployment and sustain the growth trajectory.
“In addition, the FGN border protection policy was expected to encourage and stimulate domestic production, and subsequently create employment opportunities.
“However, headwinds that could undermine these expectations include: under utilisation in the labour market due to weak aggregate demand; a build-up in inflationary pressures resulting from the VAT increase and border protection. Specifically, headline inflation was expected to accelerate to 12.68 per cent in the first quarter of 2020.”