A higher yet subpar FAAC payout

The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government picked up for the second successive month in February (from January revenues) from N400bn to N465bn (US$1.53bn). The federal finance ministry noted a marked increase in receipts from petroleum profits tax (PPT) despite the continuing force majeure at the Forcados terminal, balanced by a slight fall in collections from nonoil taxes. According to prevailing convention, the oil revenues cited are those of three months earlier.

The statutory distribution of N282bn was supplemented by VAT of N74bn, excess PPT payments of N61bn and an exchange-rate gain of N48bn.

The 2016 budget projected the net distribution from the federation account at N4.30trn and from the VAT pool at a further N1.42trn. The pro rata monthly average of N477bn has not been achieved since May once we deduct the unbudgeted extras such as exchange-rate gains (see above).

Neither the president’s 2017 budget speech nor the 2017-19 Medium-Term Expenditure Framework allows us to reach a comparable figure for the current year. Until the budget has been approved and signed off by the president, FAAC distributions cannot be made on the basis of the new projections and assumptions.

The ministry said that the balance in the excess crude account was broadly unchanged, at US$2.46bn.

Revenue allocations by the FAAC - FBNQuest Research Sources: Federal Ministry of Finance; local media; FBNQuest Research

We have taken the latest payout from the local media. Official sources provide the revenue numbers up to September, distributed in October. We use the data for gross distributions while the local media cite a combination of gross and net payouts to the three tiers.

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