NEITI Predicts Rebound In Nigeria’s Revenue

The Nigeria Extractive Industries Transparency Initiatives has projected a rebound in the Nigeria economy with continuous rise in oil prices and the increased pace of economic activities.

NEITI, in the latest edition of its quarterly review on the federation account explained that Nigeria has responded quickly to make adjustments in a number of areas to cope with the effects of the COVID-19 pandemic, and as such, the federation’s earnings could pick up.

“As prices of oil continue to rise, and with the increased pace of economic activities, it is projected that government revenue will perform better in the second half of 2020, albeit, with the possibility of shortfalls in revenue compared to budgeted figures,” it stated.

The review shows that the total disbursements from the federation account was N3.879trn in the first half 2020, made up of N1.53trn to the federal government, N1.29trn to state governments, and N771.34bn to local governments.

NEITI subsequently found that disbursements from the account in the first half of 2020 were volatile when compared to disbursements in similar periods in 2018 and 2019.

It concluded that aggregate disbursements in the second quarter of 2020 marked the third consecutive month of falling disbursements.

It noted that part of measures taken by Nigeria against COVID-19 included the downward revision of its 2020 budget in anticipation of the expected reduction in revenue, amongst others.

It further stated that the lockdown of economies as a result of COVID-19 resulted in slower rates of economic growth of countries across the world with Nigeria also affected.

The review shows that with the ease of the lockdown across the country, economic activities has commenced in full.

“Available data from January to May 2020 reveal that actual government revenue was N1.62trn.

This was 62 per cent of the expected pro-rata revenue of N2.62 trillion from the revised budget.Thus, there was a shortfall of 38 per cent in government revenue for the first five months of the year,” it added.