A marked decline in the FAAC payout

The total gross monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N649bn (US$2.11bn) in January (from December revenues). This was a decline of N164bn on the month and the lowest payout since March. The brief commentary from the OAGF noted that receipts from VAT, oil royalties and import/excise duties were a little above November’s while revenue from companies’ income tax (CIT) and petroleum profits tax was much lower. There are large variations in monthly CIT collection, the peak generally being July/August.


  • The commentary said that crude sales for export were 1.7m barrels lower than the previous month.
  • On top of the gross statutory allocation of N547bn, the distribution included N102bn in extras (VAT and exchange-rate adjustment).
  • This latest payout distributed N177bn to the states from all sources other than the 13% derivation formula for oil producing states. Those states that generate limited internally generated revenue still have to perform a juggling act over competing claims for their funding. CBN data for 2017 show that the state governments spent N221bn and N87bn per month pro rata in aggregate on recurrent and capital items.
  • They will have to pay a new monthly national minimum wage of N27,000 according to the instructions of the national council of state. At this point, it is unclear how many states will be able to afford it, and also when the National Assembly will approve the increases.
Revenue allocations (gross) by the FAAC (N bn)

Sources: Office of the accountant-general of the federation (OAGF); local media; FBNQuest Capital Research
  • The balance in the excess crude account (ECA) is unchanged at US$630m.

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