Oil Revenue Boosts FG’s Earnings by 54% to ₦2 Trillion in Q3 2024

Nigeria’s oil revenue surged by 53.59% in the third quarter of 2024, reaching ₦2 trillion, primarily due to increased earnings from petroleum taxes and royalties. However, the Central Bank of Nigeria (CBN) reported in its Q4 2024 economic report that despite this growth, revenue still fell short of the quarterly target by 62.19%.

The improvement in oil revenue was attributed to ongoing efforts to secure oil infrastructure, leading to a rise in receipts from Petroleum Profit Tax (PPT) and royalties.

Provisional gross federation account receipts stood at ₦7.23 trillion, marking a 5.31% increase compared to the previous quarter. Despite this growth, earnings were still 19.67% below the projected benchmark. While oil revenue played a role in this increase, non-oil revenue remained the primary contributor, making up 72.28% of total revenue, while oil revenue accounted for the remaining share.

Revenue allocations for the quarter saw the federal government receiving ₦1.44 trillion, state governments ₦1.49 trillion, and local governments ₦1.09 trillion. An additional ₦0.42 trillion was set aside for the 13% derivation fund benefiting oil-producing states.

Net disbursement during the period was 13.33% higher than in Q3 2024 but fell short of the quarterly target by 35.94%.

The federal government’s retained revenue also increased due to higher receipts from the federation account, non-oil excess revenue, and independent sources. Provisional figures indicated that FG’s retained revenue stood at ₦2.52 trillion, reflecting a 10.40% rise from the previous quarter, though still 48.57% below the target.

Meanwhile, government spending rose, primarily driven by increased personnel costs and interest payments. Provisional data showed that total federal government expenditure reached ₦5.60 trillion, up by 2.22% from the previous quarter but still 22.09% below the target of ₦7.19 trillion.

A breakdown of spending revealed that recurrent expenditures dominated, accounting for 75.13% of total outlays, while capital expenditures and transfer payments constituted 17.10% and 7.77%, respectively. The rise in expenditure was largely due to increases of 6.98% in interest payments and 23.31% in personnel costs.