The total monthly payout by the Federation Account Allocation Committee (FAAC) for distribution to the three tiers of government amounted to N742bn (US$2.42bn) in September (from August revenues). This was an increase of N24bn when compared with the previous month’s distribution. The federal finance ministry noted that crude oil export receipts were higher in August due to increased oil production. Based on commentary from the federal finance ministry, oil export rose from 37.4 million barrels recorded in July to 45.7 million barrels in August.
- Additionally, receipts in the federation account were higher in August for VAT, import duty and petroleum profit tax. However companies’ income tax and oil royalties decreased.
- The total FAAC payout in September comprised statutory allocation of N627bn, VAT of N115bn and an exchange rate gain of N162m. The gross statutory allocation increased marginally by 3% compared to the previous month.
- This latest payout included N139bn for the states for their gross statutory allocation. Furthermore, oil producing states collectively received an additional N53bn as 13% derivation revenue. Anecdotal evidence suggests that most states are still struggling to meet their current obligations despite multiple debt relief packages launched by the FGN.
Revenue allocations (gross) by the FAAC (N bn)
Sources: Office of the accountant-general of the federation (OAGF); local media; FBNQuest Capital Research
- The impact of the packages has not been transformative. Most state governments have been unable to generate enough revenue from taxes to pay salaries, let alone initiate any developmental projects.
- There were savings of N40bn (US$131m) into the Excess Crude Account (ECA), bringing the balance of the ECA to US$2.47bn.
- We have taken the latest payout details from thin local media reports. The data for earlier months in the chart are drawn from the OAGF.