All three tiers of government in Nigeria will have to suffer a 20.5% drop in revenue allocations for the month of July. Nairametrics had exclusively reported that N559 billion was shared by the 3 tiers of government in June, representing the highest revenue allocation in 12 months.
However, just one month later, the Ministry of Finance has said that only N444 billion Naira will be available for distribution as revenue allocation for the month of July.
In addition to oil exports, N64.308 billion was earned from value-added tax payments, the ministry further explained.
Mahmoud Isa-Dutse, Permanent Secretary of the Ministry of Finance blamed the fall in revenue to the incessant attacks on oil facilities by militants in the Niger Delta region, leading to the force majeure declared at Shell’s Forcados Terminal.
“Also, shut-in and shut-down of pipelines at other terminals due to the activities of vandals and maintenance impacted negatively on production,” he said.
This is bad news for a country who depends mainly on proceeds from oil exports for its revenue. However, the militants in the region have recently declared a ceasefire, which is believed will allow oil production and export activities to improve.
However, the increase in oil production may not all be good news, as plunging oil prices threaten to further decimate revenues accrued form crude oil exports.
Parts of this article originally appeared on Reuters.