KEY POINTS
-
Nigeria generated N26.14tn against a 10-month revenue target of N46.87tn.
-
Higher crude oil prices failed to prevent a N20.74tn revenue shortfall.
-
Revenue peaked at N4.36tn in August before falling sharply in September.
Nigeria’s revenue performance remained below budget throughout the first 10 months of 2026, even as crude oil prices climbed amid disruptions to global energy supplies.
The US-Israel strikes against Iran, which began on February 28, disrupted shipping through the Strait of Hormuz, a major route for international oil and gas shipments. The resulting uncertainty pushed crude prices higher.
Nigeria was expected to benefit from the price surge because crude oil remains a major source of government revenue.
Bonny Light, the country’s flagship crude grade, rose from an average of $70.14 per barrel before the conflict to $123.97 in a price quotation dated October 22. The increase represented a rise of approximately 76.75 per cent.
The October 22 price was also $59.12 above the Federal Government’s 2026 budget benchmark of $64.85 per barrel, meaning the crude grade was trading at almost twice the budget assumption.
A separate quotation on October 24 placed Bonny Light at about $115 per barrel, still substantially above its pre-war average.
However, the revenue figures show that higher oil prices alone were insufficient to bring government receipts in line with budget expectations.
Revenue improves between May and August
The monthly revenue figures showed considerable fluctuations throughout the period, with the government recording its strongest performance in August.
The Federal Government’s monthly statutory revenue target remained at N4.687tn, but actual receipts fell below that benchmark every month.
In January, the government generated N1.63tn, missing its target by N3.06tn. Revenue rose to N1.96tn in February before falling to N1.56tn in March, the weakest monthly performance of the first quarter.
Receipts recovered to N1.70tn in April and increased further to N2.38tn in May. Revenue reached N2.65tn in June as the upward movement continued.
July recorded a more substantial improvement, with statutory revenue reaching N3.95tn, including a N250bn augmentation. This represented an increase of approximately 49 per cent from June.
The improvement continued in August, when receipts climbed to N4.36tn, the highest monthly figure recorded during the period. The amount was only N328.41bn below the monthly target, leaving a shortfall of 7.01 per cent.
However, the improvement did not last.
September decline reverses gains
Statutory revenue dropped sharply to N2.85tn in September, a decline of N1.51tn, or 34.61 per cent, from August.
The September figure was N1.84tn below the monthly target, representing a shortfall of 39.19 per cent.
Revenue recovered modestly in October to N3.10tn, an increase of 8.64 per cent from September. Despite the improvement, receipts remained N1.59tn below the monthly benchmark.
October’s revenue was approximately 89.77 per cent higher than January’s figure, but the increase was insufficient to bridge the overall budget gap.
The figures also showed a marked difference between the first six months of the year and the following four months.
Nigeria generated N11.88tn in statutory revenue between January and June, compared with N14.26tn from July to October. The latter amount was N2.38tn higher despite covering a shorter period.
Although the stronger performance from July coincided with elevated international oil prices, the figures do not establish how much of the increase resulted directly from the oil price surge. Production levels, export earnings, exchange rates, collection efficiency and other revenue sources also affect the amount available to the government.
Shortfall threatens budget implementation
The persistent revenue gap has implications for the Federal Government, states and local governments, which rely on allocations from the Federation Account to finance public services and development projects.
When actual revenue falls below budget projections, governments may face difficulties implementing planned expenditure, funding infrastructure projects and meeting other financial obligations.
Higher crude prices can increase earnings, but the benefits depend on Nigeria’s ability to produce and export oil, collect the revenue due to the Federation and convert additional earnings into funds available for distribution.
The report also recorded N39.91bn in shared Electronic Money Transfer Levy proceeds in January. No further amounts were listed under that category from February to October. The levy was reported separately from the statutory revenue figures used in the monthly budget comparison.
Finance minister questions budget projections
The revenue shortfall comes as Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele acknowledged concerns about the assumptions underpinning Nigeria’s budgets.
Speaking at Chatham House in London, Oyedele said the country had repeatedly relied on overly optimistic revenue projections rather than realistic assessments of its capacity to generate income.
He said such assumptions had contributed to actual revenue falling significantly below budget targets.
His remarks reinforce concerns that Nigeria needs more realistic revenue forecasts and stronger revenue collection to reduce the gap between budget expectations and actual receipts.
Overall, the N20.74tn shortfall shows that the increase in global crude oil prices has not been enough to bring Nigeria’s statutory revenue in line with its 2026 budget target for the first 10 months of the year.
