Nigeria earned 676.41 billion Naira in July 2020 from 653.35 billion Naira in June. The increase in gross revenue is due to the improved sale of crude oil and tax turnover according to the country’s accountant general, Ahmed Idris.
Crude oil sales remain Nigeria’s principal source of income over the years but the COVID-19 pandemic induced lockdown reduced demand and slashed revenue drastically. This affected the revenue, weakened the naira and further created more deficits in government expenditure.
As the restrictions eased across the world, Brent oil sales dipped to its lowest in 21 years below 16 US dollars. Nigeria, like all OPEC members fund their budgets with crude oil sales.
The Nigerian government currently reports that oil revenue and income from tax improved in July- specifically, sales tax peaked in Nigeria while other ones like corporate tax and import duty tax reduced because of the movement restriction and social distancing rule enforcement during the lockdown period- This resulted no international travel with limited local movements. An acute shortage of the US dollar was also witnessed within this period. When the movement restriction was eased, commercial activities improved considerably. And 72.41 million US dollars was made from oil surplus sales by August 19, 2020 by Nigeria.
Africa’s largest economy had cumulative earning for July that was made up of sales of crude oil and the new value added tax or VAT.
Nigeria has a high debt profile and increasing revenue is a drive that all level of government has been embarking on. Early in 2020, Nigeria changed the VAT from 5% to 7.5%. This was meant to boost revenue and which it did. Despite opposition to the increase of the VAT, it is one of the lowest in the world.
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