The total monthly payout by the Federation Account Allocation Committee (FAAC) for distribution to the three tiers of government amounted to N715bn (US$2.34bn) in August (from July revenues). This was a fall of N107bn from the previous distribution. The federal finance ministry noted that receipts in the federation account were lower than in June for VAT, import duty, oil royalties and companies’ income tax, and higher for petroleum profit tax. Specifically, it highlighted maintenance programmes in the oilfields and pipeline shutdowns.
- The breakdown of the gross statutory allocation of N598bn in July shows non-mineral receipts of N222bn, which extends the welcome upward trend this year. The non-oil economy grew by just 2.1% y/y in Q2, and the rise could well be the result of improved compliance/better enforcement.
- Anecdotal evidence suggests that most states are still struggling to meet their current obligations despite five debt relief packages launched by the FGN.
- This latest payout included N179bn for the states for their gross statutory allocation. The figure fell to N149bn net after deduction for their debt obligations and contributions to federal programmes. The impact varied greatly: for example, for Lagos N5.0bn became N2.2bn, and for Zamfara N3.7bn became N2.4bn. By virtue of its substantial collection of internally generated revenue (IGR), Lagos is better placed to live with the deductions.
Revenue allocations (gross) by the FAAC (N bn)
Sources: Office of the accountant-general of the federation (OAGF); local media; FBNQuest Capital Research
- The ministry has created a committee to produce a new template for the payments by the Nigerian National Petroleum Corporation into the account, and hopes that the disagreements earlier in the year, notably over May revenues, will not be repeated.
