Government Revenue Deficit Stood at N1.46 Trillion in Q1 2020

Federal Government revenue collection declined by 36 percent or N1.46 trillion below its quarterly target for the first quarter of 2020, according to a CBN report published on Tuesday.

In the quarterly report titled “Federation Account Operations”, the apex bank said federally-collected revenue stood at N2.53 trillion in the first quarter of the year. This, it said was lower than than the N3.95 trillion targeted by the Federal Government for the quarter.

The report said, “At N2.53tn, federally-collected revenue, in the first quarter of 2020, was lower than the quarterly budget estimate of N3.95tn by 36 percent.

“Similarly, it fell below the receipt in the preceding quarter by 4.8 percent.

“The decline in federally-collected revenue (gross), relative to the quarterly budget estimate, was attributed to shortfalls in receipt from both oil and non-oil revenue components during the review period.”

A break down of the report revealed that the federal government generated N1.52 trillion or 60.3 percent of the total revenue collected in the quarter from the oil sector. The amount was 31.2 percent and 2.6 percent below the quarterly budget and preceding quarter, respectively.

The report attributed the decline in oil revenue to the shortfall in global oil prices and demand due to the COVID-19 outbreak.

Accordingly, non-oil revenue stood at N1 trillion or accounted for 39.7 percent of the total revenue generated in the first quarter. Still, this was 42.1 percent below the target of N1.73 trillion, according to the CBN report.

The decline in non-oil sector revenue was a result of a drop in Value Added Tax (VAT) and corporate tax due to the relatively low economic activities at the beginning of the year.