Federal Government and the states of the federation missed their respective revenue targets gain for October, widening the 2019 budget deficits.
At N894.09 billion, estimated federally-collected revenue (gross) in October 2019, fell below the monthly budget estimate of N1.246 trillion.
The shortfall represents 28.2 percent of the monthly budget estimate and 0.9 percent of the preceding month’s receipt, a development that has been attributed to shortfall in both oil and non-oil revenue.
The development, which shows that the country’s fiscal challenges remain, raised more worries as discordant tones were said to be trailing the new Finance bill currently at the National Assembly.
There were allegations that members of the finance committee of House of Representatives were at loggerheads with their counterparts at Senate for being left out of decisions, leading to boycott of hearings. An economist, Mr Ucha Wagbo, said the unsteady revenue stream of the government and sustained dependence on oil income, after huge debts without sustainable projects, will only have one outcome, which is bad for the economy.
“The country will continue to borrow and the worsening debt service-to-revenue ratio will persist. Nigerian leaders are too relaxed for my liking, especially in development projects. Once they pay themselves, they are contented leaving the economy in shambles,” he said.
According to Central Bank of Nigeria (CBN), in its October 2019 Economic Report, oil receipts, at N577.30 billion or 64.6 percent of total revenue, was below the monthly budget estimate of N798.83 billion by 27.7 percent.
However, it exceeded the receipt of N467.58 billion in the preceding month by 23.5 percent, while the decrease in oil revenue has been associated with shut-ins and shut-downs at some terminals of Nigerian National Petroleum Corporation, due to pipeline leakages and maintenance activities.
Specifically, at N316.91 billion, the estimated Federal Government retained revenue for October 2019, was below the monthly budget estimate of N705.44 billion, which is 55.1 percent shortfall.
A breakdown of the fiscal report showed that Federation Account pooled 88.4 percent of the total retained revenue, while Value Added Tax (VAT), Independent Revenue and Exchange Gain amounted to 4.2 percent, 7.3 percent, and 0.1 percent, respectively.
Similarly, at N316.79 billion or 35.4 percent of total revenue, non-oil receipt was below the monthly budget estimate of N447.24 billion and the preceding month’s earning of N434.52 billion by 29.2 percent and 27.1 percent, respectively.
The drop in collection, relative to the monthly budget estimate, was due to the decline in revenue from corporate tax, VAT, education tax and Federal Government Independent Revenue.