Nigeria’s revenue again slumps N36.6bn as ECA depletes to $3.1bn

Nigeria’s federal gross revenue yet again crashed N36.6 billion to N500.07 billion in November from N536.69 billion October figures as slump in both oil output and prices continue to take toll on Africa’s largest economy.

The Federation Account Allocation Committee (FAAC) which met Tuesday night to consider usual monthly allocations to the three tiers of government said the drop seen in revenue was as a result of the drastic 33 percent decline in export volume between September and October 2014, and a further decrease in

crude oil prices from $87.78 in October.

Falling international oil prices and output shocks have seen Nigeria’s revenue challenged gravely. The oil benchmark for the 2015 budget proposal to be presented to the nation’s parliament today for appropriation has been cut for the third time to $65 per barrel to accommodate the prevailing circumstances.

Crude oil prices on Tuesday dropped to a record $57.92 per barrel in the international market, much lower than the government’s proposed oil budget benchmark.

“The force majeure declared by Shell since June 2014 and the incessant shutdown and shut-in of trunks and pipelines at various terminals contributed negatively to the revenue performance for the month”, Jonah Otunla, accountant-general of the federation stated in the communiqué circulated after the FAAC meeting.

The continued drop in oil revenue has also seen a continuous depletion of the nation’s buffers to augment government spending and monthly allocations to the three tiers of government.

Bashir Yuguda, minister of state for finance, confirmed Tuesday night that the Excess Crude Account (ECA) had been depleted by $1 billion to $3.1 billion as at November from the $4.1 billion balance the previous month.

Yuguda failed to provide reasons for the new depletion, however, the coordinating minister for the economy and minister for finance, Ngozi Okonjo-Iweala, announced recently that up to half of the ECA would be drawn down to make up for the revenue shortfalls and keep the economy running.

Meanwhile, an additional sum of N36.87 billion was part of the N628.77 billion that constituted the distributed allocation for the month of November, which was shared by the three tiers of government.

Timothy Odaah, chairman, FAAC Commissioners’ Forum, who addressed journalists after the FAAC meeting expressed shock that the ECA had dropped by $1 billion.

He, however, said this would be extensively discussed at the next FAAC meeting in January.

“We were not in the know that this is the balance and nobody asked such a question until you (journalists) asked that question.

“We heard it alongside with you; so probably by the next FAAC, we must have found out what actually happened,” Oddah stated.

He said last month’s request of withdrawing $2 billion and shared among the three tiers of government had been sent to President Goodluck Jonathan for approval which must happen before the amount is disbursed.

Businessday