Nigeria’s oil revenue plummets to ₦3.9trn in Q4 2024

…As non-oil income surges

By Uche Usim

Nigeria’s oil earnings fell sharply by 22 per cent to ₦3.9 trillion in the fourth quarter of 2024.

The development, experts note, that exposes continued fiscal vulnerabilities amid the country’s dependence on crude exports.

The Budget Office of the Federation (BOF) disclosed this in its Q4 2024 Budget Implementation Report, noting that the figure represented a shortfall of ₦1.09 trillion, or 21.82 per cent, against the prorated quarterly budget estimate.

According to the report, gross oil revenue stood at ₦3.91 trillion, down from ₦4.62 trillion recorded in the third quarter of 2024, a decline of ₦714.61 billion or 15.46 per cent. However, when compared to the ₦1.89 trillion generated in the corresponding period of 2023, the performance showed a sharp year-on-year improvement of over 107 per cent.

The BOF provided a breakdown showing that Royalties (Oil & Gas) performed above expectations, generating ₦2.18 trillion, exceeding the quarterly estimate of ₦1.61 trillion by ₦578.73 billion or 36.04 percent. Concessional Rentals also outperformed projections, hitting ₦5.59 billion against a target of ₦2.18 billion, while Miscellaneous Revenue, including pipeline fees and related charges, reached ₦8.79 billion, more than double the ₦4.02 billion projected.

“Gas Flared Penalty and Exchange Gain, which had zero projection, yielded ₦108.54 billion and ₦1.22 trillion in the quarter under review,” the report stated and highlighted he contribution of non-traditional income sources to the oil sector’s performance.

However, major revenue heads fell far below projections. The Budget Office revealed that “Crude Oil and Gas Sales of ₦335.69 billion, Petroleum Profit and Gas Taxes of ₦1.25 trillion, and Incidental Oil Revenue (Royalty Recovery & Marginal Field) of ₦15.57 billion fell below their quarterly estimates of ₦366.09 billion, ₦2.99 trillion, and ₦26.25 billion by ₦30.40 billion (8.30 percent), ₦1.74 trillion (58.27 percent), and ₦10.69 billion (40.70 percent), respectively.”

The decline in oil receipts has renewed concerns over Nigeria’s fiscal resilience, especially as the federal government relies heavily on petroleum income to fund public spending. Economic analysts warn that continued underperformance could widen the deficit and pressure the naira further.

Nonetheless, officials remain hopeful. The report noted that reforms under the Petroleum Industry Act (PIA), increased security in the Niger Delta, and stricter oversight of production and export activities could bolster performance in subsequent quarters.

In contrast, non-oil revenue delivered a strong showing. Nigeria’s non-oil earnings surged to ₦4.39 trillion in Q4 2024 — ₦1.68 trillion or 62.39 percent above the quarterly estimate of ₦2.70 trillion. This was largely driven by higher Company Income Tax (₦1.5 trillion), Value Added Tax (₦1.94 trillion), and Customs collections (₦837.38 billion), all of which exceeded their respective targets by wide margins.

The report paints a mixed picture, a faltering oil sector but a buoyant non-oil economy, suggesting that Nigeria’s diversification efforts may finally be gaining traction, even as oil remains the country’s fiscal backbone.