What’s up Powerhouse Nigeria? It sure isn’t your revenue…. Nigeria used US$ 1bn of its oil savings to supplement government spending in October after revenues for the previous month fell short of its budget forecast, the accountant general said this morning. Africa’s biggest oil and gas producer shares its revenues among three tiers of government each month – federal, state and local – and tops the disbursal up with a withdrawal from its windfall oil savings if there is a shortfall. Government revenues reached 539.55bn naira in September, up slightly from 525.62bn naira in August but short of the forecast 623.77bn, due to oil supply outages, Jonah Otunla said.
Oil revenues have been hit by persistent oil theft and pipeline outages this year. The total revenue distributable to the government for October was 568.41bn naira, plus the $1bn from the excess crude account, Otunla said. The Excess Crude Account, where the government holds its oil savings, stood at around US$ 4.3bn prior to the latest withdrawal, down from US$ 9bn in December last year. The Nigerian economy is becoming increasingly attractive to portfolio investors, but they worry about the government’s tendency to squander its oil windfall.
Nigeria still has a relatively low debt-to-GDP ratio of around 20%, compared with around 50% for fellow West African commodities exporter Ghana. But that can change quickly, as we know from experience. God Luck Goodluck J. !