The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government declined for the fifth month in succession to N387bn (US$1.27bn) in December (from November revenues). The committee noted a small improvement in collections from VAT and companies’ income tax but also, more tellingly, the continuing force majeure at the Forcados, Qua Iboe and Brass oil export terminals. It also observed that oil export volumes were 340,000 b/d lower than in the previous month.
The statutory distribution of N240bn was supplemented by excess petroleum tax payments of N66bn, an exchange-rate gain of N39bn, the regular NNPC “refund” of N6bn and VAT.
The 2016 budget projected the net distribution from the federation account at N4.30trn and from the VAT pool at a further N1.42trn. The pro rata monthly average of N477bn has not been achieved since May this year once we deduct the unbudgeted extras such as exchange-rate gains (see above).
Neither the president’s 2017 budget speech nor the 2017-19 Medium-Term Expenditure Framework allows us to reach a comparable figure for next year..
However, it targets N4.94trn total revenue for 2017 including N1.98trn and N1.37trn from oil and non-oil sources. The president’s speech noted that just N2.17trn was generated in January-September. (These are revenues available to the FGN, and not to all three tiers of government).
Sources: Federal Ministry of Finance; local media; FBNQuest Research
We have taken the latest payout from the local media. 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.