The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N420bn (US$1.38bn) in November (from October revenues). It therefore remains below the forecast pro rata monthly average of N477bn per the 2016 budget, which projects the net distribution from the federation account and the VAT pool combined at N5.72trn. Both mineral and non-mineral revenues were below par in October, resulting in the lowest distribution for five months.
The federal finance minister, Kemi Adeosun, warned last month that October revenues would again be disappointing because of the three-month lag in the accounting treatment of mineral revenues.
Her point was that sabotage of oil industry installations was acute in June and July. The national accounts for Q3 2016, however, suggest that crude output may not have recovered in the balance of the third quarter (Good Morning Nigeria, 23 November 2016).
Adeosun observed after the FAAC meeting that the volume of import duty and the collection of companies’ income tax also disappointed in October.
The statutory distribution of N239bn was supplemented by excess petroleum tax payments of N109bn, an exchange-rate gain of N37bn, the regular NNPC “refund” of N6bn and VAT.
Sources: Federal Ministry of Finance; local media; FBNQuest Research
We have taken the data for the latest payout from the local media and caution that there may be some inconsistencies between reports. 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.