Lucky Obukohwo, Reporting
The Central Bank of Nigeria (CBN) has revealed a nose-dive in the Federation Account earnings.
It said that it dropped significantly to N1.94 trillion in January 2025, representing a 31.35 percent and 35.22 percent decline compared to December 2024 and the monthly benchmark, respectively.
This revelation was made in the Central Bank of Nigeria’s (CBN) January 2025 Economic Report.
According to the report, the decline was driven largely by reduced receipts from Petroleum Profit Tax (PPT), royalties, Company Income Tax (CIT), and customs and excise duties.
Despite this, non-oil revenue remained the dominant contributor, accounting for 68.67 percent of total gross revenue, while oil revenue made up the rest.
Non-oil revenue stood at N1.33 trillion, which was 22.18 percent below the previous month’s level, due to low collections from federal government independent revenue, excise duties, and corporate tax. However, it exceeded the monthly target of N1.23 trillion by 8.25 percent.
In contrast, oil revenue crashed by 45.45 percent to N0.61 trillion in January, down from N1.12 trillion in December 2024.
The CBN attributed this drop to reduced receipts from PPT and royalties, mainly due to production shut-ins caused by ageing oil pipelines and installations. The figure fell short of the monthly oil revenue target by 65.55 percent.
A breakdown of revenue distribution showed that the total federally collected revenue was N1.94 trillion.
After statutory deductions and transfers amounting to N952.38 billion, a net balance of N1.42 trillion was shared among the three tiers of government.
The federal government received N0.45 trillion, state governments N0.50 trillion, and local governments N0.36 trillion. An additional N0.11 trillion was allocated to oil-producing states under the 13% Derivation Fund.
Net disbursement was down by 17.52 percent from December and 38.30 percent below the monthly budgeted target, highlighting the continued fiscal strain caused by underperforming oil revenues and revenue collection inefficiencies.