For the first four months of the year 2022, Nigeria’s repayment of debt exceeded the revenue generated within the period, a fiscal performance report showed.
According to the 2022 fiscal performance report from January to April, obtained by POLITICS NIGERIA, Nigeria’s total revenue stood at N1.63 trillion while debt payment stood at N1.94 trillion between January and April.
The report showed that the indices defied the revenue projection of the country, which is solely dependent on oil and gas.
For instance, the gross oil and gas federation revenue for the first four months of the year was projected at N3.12 trillion but as at April ending , only N1.23 trillion was realised, representing a mere 39% performance.
Although oil prices increased, the report showed that oil revenue underperformed.
This is due to significant oil production shortfalls, resulting from pipeline vandalism and crude oil theft.
Also, the report showed that the high petrol subsidy cost posed a threat.
Other factors include the Russia and Ukraine war, the resurgence of COVID -19 in some major economies as well as renewed elevated inflation in most economies.
Nevertheless the Nigerian government is optimistic that the second quarter will be better.
“Revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipeline vandalism, ” the report said. It added that there is also seasonality to some of the non-oil taxes, which means that the nation expects to collect significantly more in the second half of the year.
“The improved revenue collection should also moderate the Debt Service to Revenue ratio, which is currently above our target level,” the report revealed.
“Efforts will however focus on improving tax administration and collection efficiency,” the report said.
“Crude oil production challenges and PMS subsidy deductions by NNPC constitute a significant threat to the achievement of our revenue growth targets, as seen in the 2022 Performance up to April.
“Bold, decisive and urgent action is urgently required to address revenue underperformance and expenditure efficiency at national & sub-national levels.”
Experts and stakeholders are however worried that the nation’s major source of revenue, which is oil and gas, is not enough to sustain the economy.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday, spoke on the need to urgently address the revenue challenge both at the national and sub-national levels.
THAT IS WHY APC HAS TO PACK