The Federal Government recorded a revenue shortfall of N443.75bn within the first seven months of this year, an analysis of the country’s income profile has revealed.
Investigations by our correspondent on Friday showed the federally collected revenue accruing to the Federation Account had continued to experience a sharp drop in spite of government’s efforts at plugging leakages in the system.
Figures from the monthly allocations to the three tiers of government of the Federation Accounts Allocation Committee also showed that the country realised N4.39tn as gross federally collected revenue in the first seven months of this year.
| President Jonathan |
The amount indicated a shortfall of N443.76bn when compared to the revenue of N4.834tn that would have accrued to the country for the seven months period.
According to the FAAC document, the monthly budgeted gross federally collected revenue for the country is put at N702.54bn, expected to be realised from three revenue sources-mineral revenue N465.057bn; non-mineral revenue N158.711bn and Value Added Tax N78.77bn.
However, while the government had budgeted to earn N702.54bn as monthly revenue, further investigations showed that it only surpassed that target once during the seven-month period.
The country’s gross revenue for the first seven months of this year was earned as follows: January, N651.26bn; February, N571.7bn; and March, N595.71bn.
In the months of April, May, June and July, the revenue received by the country was N621.07bn, N590.77bn, N863.02bn and N497.98bn, respectively.
There are also concerns that the country’s revenue projection as approved in the budget for the 2013 fiscal year may not be realised.
Figures obtained from the National Bureau of Statistics showed that the average daily production of crude oil in the second quarter of 2013 was 2.11 million barrels, declining from 2.29 million barrels in the first quarter of the year; and 2.38 million barrels, which was recorded in the second quarter of 2012.
The oil sector contributed approximately 12.9 per cent to real Gross Domestic Product in the second quarter of 2013, which was lower than the 14.75 per cent contribution in the first quarter of 2013, and the 13.86 per cent recorded during the second quarter of 2012.
Further findings by our correspondent revealed that massive oil theft, crude oil leakages owing to pipeline vandalism and downward review of some companies estimates on Petroluem Profit Tax payable were major reasons for the huge decline.
The Nigerian oil sector had in recent times witnessed massive disruptions as a result of pipeline vandalism and bunkering incidents.
While the sector had benefited immensely from the relative stability in international crude oil market price and the exchange rates of naira against the dollar, this had not translated into increased revenue to government.
President Goodluck Jonathan had on Tuesday said the country was losing between 60,000 to 80,000 barrels daily to crude oil theft.
Jonathan, who gave the figure in Abuja, while speaking at this year’s annual banking and finance conference, said the loss of 80,000 barrel lost daily as a result of crude oil theft was minimal compared to the 400,000 being reported in some quarters.
Represented at the event by the Minister of State for Finance, Dr. Yerima Ngama, the President, however, admitted that in recent times, the oil sector had brought about nothing but serious shock to the economy.
The price of crude oil in the international market sold for $113 per barrel and going by the statistics of the President, the country would be losing between $6.78m (N1.08bn) and $9.04m (N1.45bn) daily.
Jonathan said, “The oil sector has brought nothing to this country than shocks, even some new shocks that we never thought like oil bunkering and oil theft. These are shocks because once they happen they shut down the entire system.
“Most of the figures you see don’t even represent the theft. They say 400,000 barrels per day but that does not represent what is being stolen in this country.
“What is stolen is between 60,000 and 80,000 barrels per day. But once they start stealing from your pipelines, do you allow them to continue? No, you shut them down and once you shut down, the entire production stops; so, that is also lost.”
To help mitigate the impact of oil sector shocks on the economy, the President challenged the banking sector to increase funding to the real sector.
But the Nigerian Navy blamed the persistent oil theft to lack of an enabling legislation and special courts to prosecute the suspects.
The spokesman for Navy, Commodore Kabiru Aliyu, said there had not been quick prosecution of offenders and their collaborators.
He added that there was “lack of a standard scientific process as benchmark for crude oil trade such as crude oil finger printing.”
The Navy spokesman added that the industry lacked financial reporting through close monitoring and showing of information on transactions relating to oil theft.
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