The CBN’s latest monthly economic report for May ’22, shows that the gross federally collected revenue decreased by c.-22% m/m to NGN1.0trn. It also fell short of the pro-rata monthly budget benchmark of c.NGN1.58trn. However, on a y/y basis, May’s revenue figure was around 20% higher than collections in the year-earlier period. The gross receipts for May imply a cumulative revenue figure of almost NGN4.9trn for January to May ’22, or an increase of 11% y/y. We must however emphasize that there are often slight differences in the data series provided by the CBN and that of the budget office of Nigeria

The m/m decline in gross receipts by the federation was due to a -36% decrease in non-oil revenue collections at NGN549bn. As such, the share of non-oil revenue to total declined to c.54% from nearly 66% in April. Non-oil revenue also fell short of the pro-rata monthly budget of NGN789bn.

Although all three revenue segments within the non-oil sector declined m/m, the major contributor was companies' income (CIT) tax which fell by -66% m/m to NGN119bn. Due to seasonal effects, CIT receipts were low as businesses got ready for the end-of-June tax return filing deadline.

Revenue from other non-oil headline items such as customs & excise duties and value-added tax declined by -24% and -19% m/m respectively. The FGN's independent revenue was flat m/m at NGN141bn.

In contrast to the m/m decline in non-oil revenue, oil revenue increased to NGN466bn from NGN450bn in April. The slight increase in oil revenue was driven by domestic crude oil and gas sales which increased by almost 6x, and more than offset a decline in  petroleum profit tax (PPT) & royalties.

Notably, gross receipts from oil improved for the third consecutive month, thanks largely to rising crude oil prices over the period.

Regardless, following the nation’s low crude oil production, gross oil receipts have fallen far short of target this year with total receipts of just NGN1.7trn for 5M ’22 compared with a budget benchmark of c.NGN3.9trn.

The total revenue of c.NGN4.9trn for the first five months of the year underperformed the pro-rata benchmark of c.NGN6.6trn, highlighting the government's precarious fiscal position