Nigeria’s Non-Oil Revenue Surpasses Oil Revenue

In a significant economic shift, Nigeria has witnessed its non-oil revenue surpassing oil revenue over the course of twelve months. This marks the third occurrence of such a phenomenon since the oil boom in 1973, bringing attention to the evolving dynamics of the country’s financial landscape.

Data Insights

Findings by BusinessDay, based on data from the country’s Budget Office, reveal that in the twelve months of 2022, Nigeria earned N2.38 trillion from non-oil revenue, outpacing the N776 billion generated from actual oil revenue in 2023. A detailed breakdown highlights key contributors to non-oil revenue, including Company Income Tax, Value Added Tax, Customs Revenues, Federation Account Levies, and a share of the Electronic Money Transfer Levy.

Stability in Non-Oil Revenues

The Budget Office emphasized the stability and sustainability of non-oil revenues compared to their oil counterparts. The government’s commitment to diversifying revenue sources is evident in the shift towards non-oil revenue, providing a more dependable foundation for economic stability.

Challenges in the Oil Sector

Despite the passage of the Petroleum Industry Act, Nigeria’s oil revenues remain subdued. Challenges such as petroleum subsidy, oil theft, low investment, and weak sector management have contributed to the decline in oil revenue. The government’s financial strain and budget deficit have widened as a result.

Alarming Oil Theft Trends

The revelation of approximately 400,000 barrels of crude being stolen daily, amounting to a staggering $4 million loss each day, raises concerns about the sophistication of oil theft operations. The lack of effective responses and countermeasures underscores the urgency of addressing this issue to safeguard national resources.

Financial Discrepancies

Data reveals a gap in Nigeria’s oil revenue, standing at N813 billion in the first seven months of 2023, falling short of the target by N487 billion. In contrast, non-oil revenue exceeded expectations, reaching N1.83 trillion by July 2023, surpassing the initial target by N398 billion.

Fiscal Challenges and Governance

Despite the rise in non-oil income, the actual amount generated is insufficient to cover the government’s spending. Nigeria’s post-oil future remains uncertain, exacerbated by the bloated size of government and high recurrent expenditure. Experts emphasize the need to address the high cost of governance and reallocate resources for meaningful development.

For more information and insights, visit Nigeria Budget Office.