FG Made N2.6 Trillion in 2003, Says CBN
Fiscal deficit put at 2.8 per cent
From Kunle Aderinokun in Abuja
The total federally-collected revenue in 2003 hit N2.575 trillion, representing an increase of 48.7 per cent over what was realised in 2002, the Central Bank of Nigeria (CBN)has said.
This record, the CBN stated, was achieved just as the fiscal operations of the Federal Government in the review period resulted in an overall deficit of N202.7 billion or 2.8 per cent of Gross Domestic Product (GDP) compared with the overall deficit of N301.4 billion or 5.5 per cent of GDP in 2002. However, "the primary balance was a surplus of N39 billion."
In addition, the bank said the financial system was relatively sound and stable in 2003, noting that "the reported distress in the banking system was not systemic and was promptly addressed by the CBN."
In its Annual Report and Statement of Accounts for the year -ended December 31, 2003, CBN said out of the total collected revenue "the Federal Government retained revenue was N1.023 trillion, representing an increase of 42.7 per cent over the level in 2002. "
Also, according to the CBN, "the sum of N2.012 trillion accrued to the Federation Account in 2003 representing an increase of 5.9 per cent over the N1.899 trillion recorded in 2002."
The CBN attributed the improved performance in revenue largely to the developments in the world market, as crude oil prices were generally above the $22 per barrel benchmark," adding that "the overall deficit was traceable to the impact of debt service."
The bank added that the increase was also due to "significant increase in the world market and the removal towards the end of the year, of the subsidy on domestic crude oil sales to the Nigerian National Petroleum Corporation (NNPC)."
Analysis of gross revenue revealed that receipts from the oil sector increased by 68.5 per cent to N2.074 trillion constituting 80.6 per cent of the total compared with 71.1 per cent in 2002.
The CBN stated that "receipts from crude oil exports increased sharply by N998.4 billion in 2003, reflecting the higher price of crude oil in the international market.
"Revenue from Petroleum Profit Tax (PPT) and royalties contributed the sum of N683.5 billion, representing a significant increase of N291.3 billion or 74.3 per cent over the level in the preceding year."
Similarly, the bank added, "domestic crude oil sales increased by N82.2 billion or 27 per cent, following the sales of crude oil to the NNPC at the international price using a market determined exchange rate."
However, the CBN revealed that "the sum of N63.5 billion in respect of Joint Venture Cash Calls and excess crude/PPT/royalty proceeds was deducted from gross oil receipts during the year." This, according to the bank, " was N437.8 billion higher than the deduction of N125.7 billion in 2002," adding that "revenue from non-oil sources declined by 0.4 per cent to N500.8 billion in 2003."
The CBN said "Federal Government independent revenue also declined by 20.4 per cent to N54.2 billion. Company Income Tax (CIT), Customs and Excise Duties and Value Added Tax, however, increased by 28.8, 7.8 and 23.9 per cent respectively over their levels in the preceding year."
The Central Bank pointed out that, of the total Federation Account Allocation, "N1.821 trillion was distributed among the three tiers of government and the Derivation Fund."
"The increase was largely due to bigger oil revenue. The difference between gross receipts and the amount distributed reflected the exclusion of Federal Government Independent Revenue (N54.2 billion) and VAT Pool Account (N136.4 billion)," the bank added.
Meanwhile, a breakdown of the distribution, according to the CBN, showed that "the Federal Government received N917.1 billion, State Governments N419.8 billion, Local Governments N346.9 billion while N137.2 billion went to the Derivation Fund and shared among the oil-producing states."
However, the Central Bank said "Broad money supply (M2) increased by 24.1 per cent, compared with the target of 15.0 per cent set for fiscal 2003.
"Banks' lending rate declined following the downward review of the MRR by 150 basis points in July, and the effect of moral suasion on banks to reduce their lending rates in the interest of the economy."
Overall, the CBN stated, "the Nigerian financial system in 2003 comprised the CBN, the Nigeria Deposit Insurance Corporation (NDIC), 89 deposit money banks and other financial institutions (OFIs) made up of 774 community banks, 104 finance companies, 85 bureau de change, 118 insurance companies, one stock exchange, one commodity exchange, five discount houses, 81 primary mortgage institutions and six development finance institutions."
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