The federal government’s revenue target for 2024 is anticipated to decrease by N3.89 trillion as a consequence of crude oil production falling short of the set target in the 2024 budget. The draft Accelerated Stabilization and Advancement Plan (ASAP) revealed that failing to meet the target crude oil production of 1.78 million barrels per day (bpd) could lead to a revenue deficit of N3.89 trillion.
In 2024, the federal government aims to generate revenue of N19.68 trillion from various sources. However, the sub-optimal crude oil production could reduce projected earnings to approximately N15.78 trillion, resulting in the projected shortfall.
The document further explained that there is an average 27 per cent shortfall in crude oil production from the target set in the 2024 budget, putting the estimated revenue for the year at risk. The federal government hopes to generate N6.23 trillion in oil revenue in 2024, using adjusted calculations from January and February data.
The statement highlights, “Revenue for January & February 2024 was approximately 60.0 per cent of budget, largely driven by lower crude oil production volumes (running at 74.5% of budget projection). If current revenue shortfalls persist, the revenue for 2024 is unlikely to exceed ₦15.8 trillion.
“Our ability to achieve the 2024 Budgeted revenue step-up of 77.4 per cent from 2023 actual is at risk should oil production remain at 27.0 per cent below budget. 50 per cent of the annualised YTD variance suggests lower-than-budgeted revenue of ₦15.7 trillion at the current run rate.”
In the 2024 budget, the federal government set a revenue target of about N19.6 trillion and a deficit of N9.18 trillion. However, the country has failed to meet the target in the first four months of the year.
The document showed that the government has set a target of producing 2 million barrels of oil daily by the end of the year. Additionally, it aims to produce four million barrels of oil daily within three years.
In March, President Tinubu signed a series of Executive orders to attract investment into the oil and gas industry to boost production.Furthermore, the president has instructed security agencies to curb oil theft in the Niger Delta region and fast track the approval of divestment plans by oil majors to stimulate investment in exploration and new production fields.
