The Central Bank of Nigeria (CBN) has reported a significant 67% increase in the Federal Government’s non-oil revenue collection to around N4 trillion in the third quarter of 2023.
According to the CBN’s latest economic report, the government’s overall revenue, including oil earnings, rose by 50.1% compared to the previous quarter. However, total receipts remain 9.5% below budget estimates.
The revenue growth is attributed to higher company income tax, customs duties, value-added tax payments, and dividends from oil production contracts and the Nigerian National Petroleum Company Limited (NNPC).
Non-oil sources make up over 80% of revenue.
Notably, non-oil sources accounted for as much as 83%, or N3.98 trillion, of the total N4.79 trillion in revenue earned during the quarter. Oil revenue contributed the remaining 17%, or N814 billion.
While oil takings improved slightly by 0.6%, non-oil collections posted a 66.9% quarter-on-quarter jump. This performance beat targets by 38% and signals greater economic activity and efficiency in tax administration procedures.
The removal of fuel subsidies boosted monthly revenue to N1 trillion.
Earlier policy moves by the administration to eliminate petrol subsidies and unify exchange rates, despite stoking inflation, delivered over N1 trillion monthly to the federation account on average in the last four months.
However, the lack of transparency around NNPC’s earnings from subsidy removal and remittances to government coffers has drawn criticism from the World Bank.
The higher non-oil revenue collection provides fiscal relief for infrastructure spending and reduces dependence on global oil price shocks. But sustaining these receipts hinges on continuous economic expansion and reform.