Nigeria’s oil revenue surged by 53.59% in the fourth quarter of 2024, reaching ₦2 trillion, driven by higher receipts from oil-related revenues. However, the Central Bank of Nigeria’s (CBN) economic report for Q4 2024 indicated that these earnings fell short of the quarterly target by a significant 62.19%.
The growth in oil revenue was supported by ongoing efforts to secure oil infrastructure, which contributed to increased receipts from petroleum profit tax (PPT) and royalties compared to the previous quarter. However, despite the rise, the earnings still did not meet the benchmark set for the period.
Provisional gross federation account receipts totaled ₦7.23 trillion, marking a 5.31% increase from the preceding quarter. However, this was 19.67% below the targeted benchmark for the quarter. While the growth in federation receipts was largely due to higher oil proceeds, the CBN’s report highlighted that non-oil revenue remained dominant, accounting for 72.28% of the total, while oil revenue contributed the balance.
Non-oil revenue stood at ₦5.23 trillion, which, despite being 6.03% lower than in the preceding quarter, was 41.30% above the target. The decline in non-oil revenue relative to the previous quarter was mainly due to lower collections from corporate tax, a seasonal impact of tax return filings by companies.
Out of the ₦7.23 trillion in federally collected revenue, ₦4.44 trillion was allocated to the three tiers of government after accounting for statutory deductions, transfers, and additional revenue. The federal government received ₦1.44 trillion, states received ₦1.49 trillion, and local governments received ₦1.09 trillion. The remaining ₦0.42 trillion was directed to the 13% derivation fund for oil-producing states.
This net disbursement represented a 13.33% increase compared to Q3 2024 but fell short of the quarterly target by 35.94%.
For the federal government, retained revenue saw a rise during the review period, reaching ₦2.52 trillion—10.40% above Q3 2024 levels, though it was still 48.57% below the quarterly target. This increase in retained revenue was largely driven by higher receipts from the federation account, non-oil excess, and federal government independent revenue.
On the expenditure side, the federal government’s provisional aggregate expenditure rose to ₦5.60 trillion, a 2.22% increase from the preceding quarter, but it was still 22.09% short of the target of ₦7.19 trillion. The rise in expenditure was largely attributed to an increase in interest payments and personnel costs, which rose by 6.98% and 23.31%, respectively.
A breakdown of the total expenditure revealed that recurrent spending accounted for the largest portion, making up 75.13% of total outlays, with the remainder split between capital expenditures (17.10%) and transfer payments (7.77%).
Overall, while the oil sector saw significant growth in revenue, the federal government still faced challenges in meeting both its revenue and expenditure targets for the quarter.
