The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government picked up in June (from May revenues) from N419bn to N462bn (US$1.51bn). The federal finance ministry noted a healthy increase in receipts from companies’ income tax. This was a revealing statement since these receipts generally peak in July and August. The ministry also reported a decline in crude output of about 30,000 b/d, which, in line with prevailing convention, we take to refer to the level three months earlier.
The statutory distribution of N317bn was supplemented by VAT of N80bn and an exchange-rate gain of N65bn. The ministry confirmed that the NNPC had settled its final monthly payment of N6.3bn under the agreement with the committee in 2011 to clear its then said indebtedness of N450bn.
We do not have enough detail from the approved 2017 budget to quote the projected net distributions from the federation account and the VAT pool.
That said, the pro rata monthly average of N477bn combined in the 2016 budget will surely be higher this year: the FGN is assuming a firmer oil price and weaker naira than in 2016. For the sake of comparison with the budget projection, the latest payout has to be stripped of one-offs such as the exchange-rate gain and is therefore well short of budget expectations.
The ministry said that the balance in the excess crude account stood at US$2.30bn.
We have taken the latest payout from the local media. The accountant-general’s office provide the revenue numbers up to December 2016, distributed in January. We use the data for gross distributions while the local media cite a combination of gross and net payouts to the three tiers.