A tentative recovery in distributions

The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N610bn (US$1.99bn) in December (from November revenues). This was an increase of N77bn from the previous monthly distribution, which was made more than two weeks late because of challenges by the state governors to the accounts submitted by the NNPC (Good Morning Nigeria, 11 December). The higher payout was driven by a rise in the average crude price from US$48.7/b the previous month to US$52.1/b.

The allocation was made earlier in the month than usual because the committee was anxious for state governments to make their monthly salary payments before the holidays. States have also received the third instalment of refunds for pre-2005 overpayments to Paris Club and other external creditors.

The gross statutory distribution was N529bn. This was supplemented by VAT receipts of N77bn, which were N9bn lower than the previous month. Indirect tax payments such as VAT are a guide to household consumption, so we should nuance any remarks about broader economic recovery.

The chart shows a broad upward trend in the distribution over the past 12 months. In part, however, this reflects the pick-up in crude oil production since Q1. We would like to herald a sustained boost to non-oil revenue collection but have to talk of a tentative recovery for the time being.

A tentative recovery in distributions - FBNQuest Research

We have taken the data for the latest payout from local media reports. The accountant-general’s office supplies the revenue numbers up to December 2016, shared out in January, and the National Bureau of Statistics through to September, distributed in October.

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