Low oil production threatening our ability to achieve 2024 budget revenue — FG

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The Federal government has decried the impact of lower crude oil production volumes on its revenues and ability to achieve the N19 trillion revenue projection in the 2024 budget.

This is contained in the Accelerated Stabilisation and Advancement Plan (ASAP) which was developed by the federal government’s Economic Management Team, EMT Emergency Taskforce (EET), and presented by Wale Edun, the minister of Finance and coordinating minister of the economy on Wednesday.

According to the Minister, the federal government’s retained revenue for January and February 2024 was approximately 60.0 percent of the budget, largely driven by lower crude oil production volumes, running at 74.5 percent of the budget projection. He added if current revenue shortfalls persist, the revenue for 2024 is unlikely to exceed ₦15.8 trillion.

This is as oil production currently stands at 1.4 mbpd compared to the 1.78 mbpd budget assumption and OPEC Quota of 1.5 mbpd, resulting in federal government revenue shortfalls. He added that the difficult economic conditions are threatening to unravel bold reforms undertaken by President Bola Ahmed Tuinubu-led administration.

“Our ability to achieve the 2024 Budgeted revenue step-up of 77.4% from 2023 actual is at risk should oil production remain at 27.0 percent below budget.50% of the annualized YTD variance suggests a lower-than-budgeted revenue of -N15.7 trillion at the current run rate,” he said.

“Difficult economic conditions are threatening to unravel bold reforms undertaken by Mr. President. The macroeconomic environment including persistently high inflation at 33.7 percent is the highest in almost 3 decades, high interest rates (Monetary Policy Rate at 26.3 percent) make it difficult for businesses to borrow and the exchange rate remains volatile with the resulting uncertainty disrupting economic activity.”

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