• As Nigeria Records 1.63mbd Of Oil Production, N397.74bn Deficit

In continuation of its resolve to sustain intervention in various segments of the nation’s foreign exchange market and as part of stabilizing the value of the Naira, the Central Bank of Nigeria (CBN) says it sold a total of $2.64bn to authorized dealers in the month of May.
This was the first full month of intervention in the FX market which began on April 21.
According to the May edition of the CBN’s Economic Report, the intervention represented a 70.8% rise over the level in April 2017 and 106.1% corresponding period of 2016. As a result, the Naira exchanged at an average rate of N305.54/$ in the inter-bank segment, appreciating by 0.2%, compared with the level in the preceding month. It however depreciated by 35.5%, relative to the level in the corresponding period of last year.
During the month, foreign exchange inflow into the economy stood at $5.78bn, representing a 30.8% rise over the level in the corresponding period of 2016, with inflow through autonomous sources for the period was $3.52bn or 60.9%, while $2.26bn or 39.1% was through the CBN. Non-oil sector inflow, at US$1.39bn representing 23.1% of total, fell by 30.2%, which was below the level in the preceding month.
Aggregate forex outflow from the economy, at $3.18bn, rose by 38.8% and 70.4% above the levels in the preceding month and the corresponding month of 2016, respectively. This resulted in a net inflow of $2.6bn during the review month, compared with $3.79bn and US$2.55bn in the preceding month and the corresponding period of 2016, respectively.
Meanwhile, the Federal Government estimated retained revenue for the month was N583.32bn, but only received N185.58bn, which was 48.8% down from the budget monthly estimate of budget estimate of N894.76bn. The N185.58bn was Abuja’s share of the N458.42bn gross federally collected revenue, which was 13.4% down from the N529.1bn in April. The decline followed the fall in both gross oil and non-oil revenue which stood at N238.09bn and N220.33bn respectively, constituting 51.9% and 48.1% of total revenue.
According to the CBN data, in the 13 months since May 2106, Nigeria’s federally collected revenue achieved a spike at N783.7bn last July, with non-oil revenue contributing N435.6bn or 55.58%, while oil revenue stood at N348.1bn or 44.41%; followed by the N561.8bn of last September, with none-oil revenue still contributing the lion’s share. At a time the Federal Government expects non-oil revenue to contribute the bulk of its earnings, the reverse has been the case since November last year, except for the month of January when non-oil revenue accounted for 53.1%; while the situation was worse in the following month when non-oil revenue was a mere 38.03%. In May, gross oil receipt was 51.9% of total revenue, lower than the monthly budget estimate of N449.62bn by 47%. It was equally 21.5% below the N303.43bn collection in April.
The Federal Government’s retained revenue which resulted in an estimated deficit of N397.74bn, more than double the N196.4bn recorded in April, followed “the fall relative to the monthly budget estimate was attributed, largely, to the short fall in both oil and non-oil revenue components.”
The Federal Government’s “recurrent and capital expenditure accounted for 61% and 34.3%, respectively, while transfers accounted for the balance of 4.7% of the total expenditure. A breakdown of the recurrent expenditure showed that non-debt obligation was 76.8 per cent of the total, while debt service payments accounted for the balance of 23.2%.
From the Federation Account, total estimated statutory allocations to state governments fell to N147.42bn, as against N163.74bn in April, down by 47.9% from the N282.84bn monthly budget estimate. The 774 Local Government Councils across the country distributed N87.77bn from the federation and Value Added Tax (VAT) pool account, down from the monthly budget estimate of N170.92bn b 48.6%.
The report also estimated Nigeria’s domestic crude oil production at 1.63m barrels per day or 50.53m barrels for the entire month, out which 1.18mbd or 36.58mb was exported during the review month., helped by the sustained breather in the sabotage of crude oil installations in the Niger Delta region, which eased upstream production. The May production level represented an increase over the 1.5mbpd and 45mb recorded in April.
“The average spot price of Nigeria’s reference crude oil, the Bonny Light (37° API) fell to US$51.20 per barrel in May 2017 from US$52.89 per barrel recorded in April 2017, representing a decline of 3.20 per cent,” the report added.
Crude oil allocation for domestic consumption remained at 0.45mbpd or 13.95mb during the month.