Lagos — The oil and gas sector, for years the main revenue generator in Africa's largest economy, is the sole under-performer in Nigeria's economic recovery.

The monthly economic report the Central Bank of Nigeria (CBN) released for January indicate that gross federally collected revenue increased by 20 percent year-on-year to N945 billion (US$35,15 billion).

The major under-performance was from the oil sector, whose performance offset a strong revenues delivered by the non-oil sector.

"This is unsurprising, given recent reports of low crude oil production due to oil theft and pipeline vandalisation," FBN Quest Nigeria stated.

The market watcher highlighted crude oil revenue amounted to a paltry N330 billion, representing a decline of 10 percent y/y and 20 percent lower than the preceding month.

Furthermore, oil revenue was also 35 percent lower relative to the monthly benchmark.

On a monthly basis, revenue from petroleum profit tax and royalties declined to N247 billion compared with N360 billion the previous month.

In contrast to oil's jaded performance, non-oil revenue increased by 47 percent y/y and 11 percent month-on-month to N615 billion.

It also outperformed the benchmark by 19 percent.

All the major segments within the non-oil sector expanded by double-digits relative to the prior year and came in ahead of their pro-rata monthly targets.

FBN Quest attributed some of the gains from non-oil revenue to the implementation of the 2021 Finance Act, which increases the scope of the government's taxable revenue base.

Africa's largest oil producer has the capacity to produce 2 million barrels per day but production has declined in recent months to around 1,6 million daily.

- CAJ News