Nigeria’s distributable government revenues fell to N429.127 billion in February, from 465.19 billion naira in January, due to lower oil prices and attempts to sabotage the nation’s oil pipelines in the Niger Delta region.
Distributable revenue is government’s income that is shared at various levels of state, including the Federal, state and local governments.
Similarly, average oil price fell to $44.74 from $49.57 per barrel in February, according to a data released by the Central bank of Nigeria.
“Production diminished during the period due largely to leakages in the pipelines arising from sabotage,” it added.
However, Nigeria, which is a member of Oganisation of Petroleum Exporting Countries, last year entered its first recession in a quarter of a century, relies on crude oil sales for two-thirds of its government revenue, but has been hit hard by the fall in global crude prices since mid-2014.
Militants have carried out attacks on oil and gas facilities in the Southern Niger Delta energy hub for a year, cutting oil production – which stood at 2.1 million barrels per day at the start of 2016 – by as much as a third, though output has since mostly recovered.
Attacks have halted in recent months with talks between the government and Delta community leaders to address the grievances of militants, who want the oil hub to receive a greater share of the country’s energy wealth.
Consequently, the naira firmed up to 1.1 per cent on the black market on Wednesday to a six month-high of 430 per dollar, traders said.
It was quoted at 307.50 on the interbank market. The CBN has been intervening in the official market to try to narrow the currency spread. The black market rate was 520 a month ago.
“The regular intervention by the CBN has increased liquidity in the official market. The new policy has also eliminated spurious demand for the dollar,” President of Association of Bureaux de Change of Nigeria, Aminu Gwadabe, said.
The apex bank had injected a total of $180 million into the foreign exchange market, just as the monetary authorities were brainstorming on how to review the impact of policies in an effort to stabilise the market and strengthen the naira.
The CBN spokesperson, Isaac Okoroafor said the offer, through the inter-bank window, was to enable banks meet bids for wholesale auction and requests for invisibles such as medical and school fees as well as personal/basic travel allowances, which got an allocation of about $80 million.
Mr. Okorafor, who confirmed the fresh injection of forex to the market, said the wholesale requests would be settled soon, adding that the CBN was optimistic that its continued intervention would impact on the value of the Naira, which has continued to strengthen in the foreign exchange market against other international currencies, including the dollar, pound and euro.
