The persistent drop in oil prices and low receipts from non-oil sources may have led to a N1.31tn shortfall in revenue accruable to the federation in the first three months of this year, investigations have revealed.
The National Assembly had while passing the 2015 budget last week approved a benchmark oil price of $53 per barrel, which is $1 higher than the $52 per barrel proposed by the Executive.
As a direct result of raising the benchmark price, the gross federally collectible revenue had increased by N169.84bn from N9.61tn to N9.78tn.
The N9.78tn, when spread over a 12-month period upon which the amount is to be generated, translates into monthly revenue of N815bn or N2.44tn per quarter.
Investigations by our correspondent on Wednesday, however, revealed that in the first three months of this year, a total sum of N1.13tn was generated from mineral and non-mineral revenue sources.
When compared to the amount approved in the 2015 budget, the N1.13tn, which is based on actual receipts approved by the Federation Accounts Allocation Committee, represents a decline of N1.3tn or 53 per cent within the period.
Further analysis of the gross federally collectible revenue showed that out of the budgeted revenue of N815bn expected to be raised in January, the actual receipts from mineral and non-mineral sources was N416.09bn, representing a decline of N398.91bn or 48.9 per cent.
For the month of February, the sum of N401.46bn was generated, indicating a decline of N413.54bn or 50.7 per cent when compared to the budgeted amount of N815bn.
The lowest amount of generated revenue was recorded in the month of March, which saw the sum of N315.04bn accruing to the Federation Account.
The N315.04bn generated in March represents a decline of N499.06bn or 61.34 per cent when compared to the budgeted estimate.
The FAAC had in its monthly report blamed the continued shutdown of oil trunks and pipelines at various terminals for the shortfall in the country’s revenue.
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had said on Tuesday that managing the economy since the crash in oil prices had been very challenging for the Federal Government.
For instance, she said the country experienced 50 per cent cut in revenue owing to drop in oil prices, coupled with low revenue receipts from non-oil sources as most companies had yet to file in their tax returns.
This, according to her, made the government to borrow the sum of N473bn out of the N882bn provided for borrowing in the 2015 budget in the first quarter of the year.
The minister said in as much as the Federal Government had in the past tried to reduce the level of borrowing, such could not be achieved this year due to cash flow problems.
Okonjo-Iweala said, “As you know, I have been honest with you since the current economic problems started. I would like to repeat: we have serious challenges; things have been tough since the beginning of the year and they are likely to remain so till the end of the year.
“We have serious challenges but we also have strengths; and if we do the right things, we can keep a steady course and emerge out of the current situation. As a result of the 50 per cent decline in oil revenues, the country has faced a difficult cash crunch and the Federal Government has focused on keeping the economy stable and the government running through a series of measures.
“We have front-loaded the borrowing programme to manage the cash crunch in the economy. In January, we had a deficit in terms of the money we had and the expenditure we had to carry out. So, we had to borrow to add to what we had.
“In February, it was the same. In March, we were able to have more internally generated revenue that enabled us to offset, but in April, we had to borrow to cover up some gap. This is how we have been managing the economy on a month-by-month basis.”
The minister added that the Federal Government had already utilised more than half of the budgetary provisions for borrowing for the year in the first four months to pay salaries and provide funds for overheads.
Okonjo-Iweala said while the Federal Government had been able to meet its recurrent expenditure despite the cash flow problem, such could not be achieved for capital projects.
According to her, the cash crunch has made it practically impossible to release any fund for capital projects since the beginning of the year.
Considering the revenue challenge, the minister said the goal of the government now was to ensure that funds were made available to meet recurrent expenditure.