The Federation Account Allocation Committee (FAAC) disbursed the sum of ₦647.35 billion to the federal, state and local of governments in February which is 9.6 percent lower than the ₦716.30 billion disbursed in January1,2. Disaggregated data shows the federal, state, and local governments received ₦267.39 billion, ₦176.92 billion, and ₦132.94 billion respectively. This decline comes as a result of a decline in revenue generated due to the fall in oil prices associated with the coronavirus pandemic. Relatedly, the federal government has revised the 2020 budget in order to account for a decline in oil revenue which includes a 20 percent cut in capital projects. Going forward, there would be a further decline in the federal allocation as the mainstay of the government’s revenue is hit by the pandemic. Sub-national governments should endeavor to generate substantial revenue to free them from the volatilities of oil prices. Aside from tax, the government should leverage on the pandemic by equipping locals to boost the production of domestic commodities in import-substitution sectors.
April 27, 2020
Nigeria Economic Update (Issue 14)
Related
Nigeria Economic Update (Issue 51)
Recently released data by the National
Bureau of Statistics (NBS) shows that there was significant increase in Nigerias
total merchandise trade for 2016Q3. Basically, the total merchandise trade
increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil
exports increased by 31 percent to N1, 943 billion, while non-oil exports
increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria
recorded yet another trade deficit of N104 billion, indicating continuous
higher imports relative to exports. Overall, though there is improvement in the
performance of non-oil sector, however, this is insufficient to effectively
complement the loss in oil trade sustained since the beginning of oil price
crash. This suggests that diversification into non-oil sector may not be able
to rescue the economy in the short term. However, while the diversification
efforts should be sustained, eliminating hurdles in oil production may be
instrumental to higher exports, especially as oil price increase is gaining
momentum.
Nigeria Economic Update (Issue 50)
In the third quarter of 2017, NBS report show that Nigeria recorded a marginal quarter-overquarter and significant Year-on-Year increases in the value (in Naira terms) of merchandise (goods) foreign trade. At N5.92 trillion, total merchandise trade increased 3.9 percent over the preceding quarter and 23.9 percent over the corresponding quarter in 2016. Specifically, with exports rising QOQ by 15.2 percent to N3.57 trillion and imports shrinking by 9.4 percent to N2.35 trillion, trade balance amounted to a surplus of N1.22 trillion in 2017Q3- a substantial 142 percentage increase (QOQ) in trade surplus value.