A Fall in the September 2021 FAAC Distribution, Records a Decrease of N64bn

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Tuesday, September 28, 2021 / 10:41 AM / by FBNQuest Research / Header Image Credit: FBNQuest 

        

The gross monthly distribution by the Federation Account Allocation Committee (FAAC) to the three tiers of government and public agencies totalled to NGN697bn (USD1.69bn) in September (from August revenue). This was a decrease of NGN64bn on the previous payout. From scanty coverage in the local media, we learnt that the take from VAT and import duty increased significantly over the previous month, while receipts from petroleum profit tax (PPT), companies' income tax, excise duty, and oil and gas royalties recorded decreases. State governments received a total of NGN246bn, including NGN29bn, representing the 13% derivation for the few oil-producing states.

 

The headline figure is made up of NGN478bn in gross statutory distribution, NGN166bn from the VAT pool, recovered exchange gain and recovered excess bank charges of NGN3bn and NGN403m respectively, and NGN50bn from non-oil revenue.

 

The balance in the Excess Crude Account (ECA) was unchanged at USD61m.

 

Of the total distribution, NGN72bn was expended on a combination of costs of collection, statutory transfers and unspecified refunds.

 

From the NNPC's FAAC report for August '21, we understand that a total deduction of NGN215bn was to be made from the corporation's remittance to FAAC this month. The figure consists of a NGN175bn fuel subsidy spending (which was termed "value shortfall") in July, and a NGN40bn outstanding balance from earlier.

 

Average monthly allocation for January through September '21 amounted to NGN667bn, compared with NGN710bn in 2018, NGN685bn in 2019 and NGN636bn last year.

 

This latest payout to states again falls far short of their spending. Only a small number of states, led by Lagos, can meet all their obligations at these reduced levels of FAAC distribution because they collect substantial sums of internally generated revenue (IGR).

 

The ongoing debate on VAT collection between Rivers and Lagos State governments and the FIRS has been moved to the Supreme Court. This came after the Court of Appeal ruled that the involved parties maintain status quo pending the hearing and determination of the application for stay of execution by the FIRS.

 

Revenue allocations (gross) by the FAAC (NGN bn)

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Sources: Local media; FBNQuest Capital Research

 

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Related to FAAC

  1. FAAC Disburses N640.31bn in February 2021 - NBS
  2. FAAC Disburses N619.34bn in January 2021 - NBS
  3. FAAC Disburses N2.49trn to FG and N2.30trn to States in Year 2020 - NBS
  4. FAAC Disburses N601.11bn in December 2020 - NBS
  5. FAAC Disburses N604.00bn in November 2020 - NBS
  6. FAAC Disburses N639.90bn in October 2020 - NBS
  7. FAAC Disburses N682.06bn in September 2020 - NBS
  8. FAAC Disburses N676.41bn in August 2020 - NBS
  9. FAAC Disburses N696.18bn in July 2020 - NBS
  10. FAAC Disburses N547.31bn in June 2020 - NBS
  11. FAAC Disburses N606.19bn in May 2020 - NBS
  12. FAAC Disburses N780.93bn in April 2020 - NBS
  13. FAAC Disburses N581.57bn in March 2020 - NBS
  14. FAAC Disburses N647.35bn in February 2020 - NBS
  15. FAAC Disburses N716.30bn in January 2020 - NBS
  16. FAAC Disburses N2.93trn to FG in 2019 - NBS
  17. FAAC Disburses N650.83bn in December 2019 - NBS


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