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With 2019 drawing to a close, we decided to review the Federal Government’s revenue performance in 2019, following the record N10.6 trillion budget for 2020 signed by the President Muhammadu Buhari wherein the fiscal authorities have a revenue target of N8.2 trillion which we consider to be ambitious.

Based on the 2019 budget, the Federal Government set out to achieve a revenue of N7.0tn which in our opinion was optimistic considering the subdued recovery in the non-oil sector which has hindered the growth in non-oil revenue amidst constraints in actualising the 2.3mb/d oil production benchmark with its attendant impact on oil revenue.

Economy: Reviewing FG’s 2019 revenue performance

Comparing estimated actual revenue for the first eleven months in 2019 as against the budgeted revenue per month, our analysis revealed that average revenue performance printed at 53.0% with the best performance recorded in July (65.0%) while March (43.0%) recorded the worst performance. According to data obtained from the apex bank’s monthly and quarterly economic report, total revenue printed N3.4 trillion for the first eleven months of 2019 as against prorated budgeted revenue of N6.4 trillion.


In our view, the government’s revenue performance in the year under review echoes concerns that have been expressed by stakeholders as well as the investing community as a whole. The recurring failure in achieving non-oil revenue reflects the presence of structural factors that limit the proliferation of high productivity jobs in the real sector despite efforts to increase the tax base. Furthermore, oil production figures remain well below budget estimates.

In our opinion, we believe the federal government should cut its revenue targets in line with economic realities whilst implementing reforms targeted at addressing the core structural barriers that hinder productivity. In addition, we think improving non-oil revenue remains FG’s biggest opportunity of growing revenues considering pressure from OPEC for the country to cut production in order to abide by its quota.

[READ MORE: Equities: Will Santa Claus visit the local bourse?]

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