Nigeria Returns to Crude Oil to Fund Budget
By Modupe Gbadeyanka
Following the dismal performance of non–oil mineral revenue in 2016, Nigeria has again turned attention to crude oil to fund the 2017 fiscal plan, as can be gleaned from the proposed plan before the National Assembly, where oil mineral resources are projected to provide the bulk of the revenue.
They have now moved from the 19 percent they were projected to fund the plan, to 40 percent, and non-oil revenue, which this year was projected to play the lead role, is now to take the back seat.
The projection for its revenue has cascaded down, with expectation from independently generated revenue cut down from N1.506 trillion in 2016, to N808 billion; taxes from companies income taxes from N867 billion to N808 billion, while only Value Added Tax (VAT), which is a consumption tax, has been slightly moved up from N198 billion to N242 billion.
Accordingly, the 2017 proposal based on the key assumptions and budgetary reform initiatives now envisages the total Federal Government revenue of N4.94 trillion, which will exceed the 2016 projection by 28 per cent.
In the projected revenue, receipt from oil now is N1.985 trillion and that of non-oil is N1.373 trillion. The contribution of oil revenue is 40.2 percent compared to 19 per cent in 2016, driven mainly by JVC cost reduction, higher price, exchange rate and additional oil-related revenues.