Nigeria’s non-oil revenue surged to N4.387.93 trillion in the fourth quarter of 2024, representing an increase of N1.68 trillion (62.39%) above the quarterly estimate of N2.70 trillion.
The Budget Office of the Federation revealed this in its latest published Q4 2024 Consolidated Budget Implementation Report (BIR).
This result was driven by strong receipts from Company Income Tax (CIT) of N1.5 trillion, Value Added Tax (VAT) of N194 trillion and Customs collections of N837.38 billion, which all exceeded their targets by 79.79%, 96.94% and 16.75% respectively.
The better‐than‐expected non-oil revenue helped cushion the shortfall in oil sector receipts, with the net distributable revenue in Q4 rising to N7.5 trillion – up N727.37 billion (10.75%) from the projected N6.76 trillion – signalling that the government’s diversification efforts may be gaining traction.
Oil revenue disappoints
Nairametrics review of the report revealed that gross oil revenue for the quarter stood at N3.9 trillion, about 21.82% or N1.09 trillion short of the quarterly budget estimates, and N714.61 billion (15.46%) below the third quarter of 2024 figure of N4.62 trillion.
- On the positive side, the Q4 oil revenue was N2.022 trillion (107.23%) above the corresponding period in 2023 (N1.88 trillion). Net oil revenue accruing into the Federation Account for Q4 amounted to N3.34 trillion, which was N896.57 billion (21.12%) below the estimated N4.24 trillion, and also N639.03 billion (16.02%) lower than the third quarter 2024 level of N3.98 trillion.
- The under-performance has been attributed to declining oil prices (average US$74.65 per barrel in Q4 2024), lower production rates, crude theft, infrastructural bottlenecks and high fiscal deductions for subsidies and other obligations.
Budget implications and fiscal risks
With oil revenue under-running the budget by roughly one-fifth in the quarter, the government’s funding assumptions are under pressure for the current year. For the full year 2024, the gross oil revenue was N15.06 trillion against a budget projection of N19.99 trillion, representing a N4.92 trillion (24.65%) shortfall.
Non-oil revenue, however, beat its full year target of N10.80 trillion by N5.28 trillion (48.91%) with collections of N16.09 trillion. While the strong non-oil revenue performance helps mitigate the shock, the oil shortfall exposes the persistence of vulnerability in Nigeria’s fiscal architecture, which remains heavily dependent on the petroleum sector. Going forward, this might improve as tax reform kicks in next year with sustained diversification, revenue efficiency and other structural reforms critical to maintaining fiscal stability.
What you should know:
The 2024 Budget of ‘Renewed Hope’ outlined a total expenditure of N27.5 trillion (equivalent to $36.7 billion), with a projected revenue of N18.32 trillion ($24.4 billion) and a deficit of N9.18 trillion ($12.2 billion).
To achieve the projected revenue, the Federal government estimated oil revenue at N7.68 trillion, Government Owned Enterprises were expected to contribute N4.07 trillion, non-oil taxes were projected to be N3.52 trillion, independent revenue was set at N1.91 trillion, minerals and mining will account for N4.55 billion, while other revenue sources will bring in N1.13 trillion.
The expenditure breakdown comprised a non-debt recurrent expenditure of N9.92 trillion, a capital expenditure of N7.72 trillion (exclusive of transfers), Debt service was projected to gulp up to N8.25 trillion, a statutory transfer of N1.37 trillion, and a sinking fund of N243.66 billion.
