A Sharp Fall in the FAAC Payout; May Payment Amount to N606bn


Tuesday, May 19, 2020 / 09:36 AM / by FBNQuest Research / Header Image Credit: FBNQuest


The gross monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N606bn (US$1.57bn) in May (from April revenue). This was a decline of N175bn on the previous month's payment. We saw from the thinner-than-usual coverage in the local media last week that receipts from petroleum profit tax, companies' income tax, import and excise duty, and VAT were all lower on the month. State government finances are particularly squeezed. The better placed states are those that benefit from the 13% derivation formula and/or generate healthy internal revenue.


The gross payout included the statutory allocation of N370bn and the VAT Pool of N94bn. We assume that part of the balance consisted of exchange-rate gains, recalling the sizeable adjustment to the official/preferential rate by the CBN from N307 per US dollar to N360 on 20 March.


The VAT payout declined from N120bn the previous month. The standard rate of VAT was lifted from 5.00% to 7.50% from February but household demand is at best fragile and we should allow for the impact of the lockdown too.


The total payout is set to decline in the months ahead since Nigerian crude is generally sold three months forwards. The price in March and April was at its low point in this cycle. One prominent state governor has suggested that the distribution from June revenue in July may not reach N200bn.


The president is said to have authorized the withdrawal of US$150m from the stabilization fund managed by the Nigerian Sovereign Investment Authority to supplement June's revenue.


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


Proshare Nigeria Pvt. Ltd.


Sources: Office of the accountant-general of the federation (OAGF); local media; CBN; FBNQuest Capital Research


Full details of FAAC distributions are available on the OAGF website. The most recent, however, date back from July 2019 (on June revenue).

Proshare Nigeria Pvt. Ltd.


Related Links

  1. FAAC Disburses N647.35bn in February 2020 - NBS
  2. FAAC Disburses N716.30bn in January 2020 - NBS
  3. FAAC Disburses N2.93trn to FG in 2019 - NBS
  4. FAAC Disburses N650.83bn in December 2019 - NBS
  5. FAAC Disburses N702.02bn in November 2019 - NBS
  6. FAAC Disburses N693.52bn in October 2019 - NBS
  7. FAAC Disburses N740.87bn in September 2019 - NBS


Proshare Nigeria Pvt. Ltd.

Related News

  1. A Surprising Boost to the FAAC Payout; April Payment Amount to N781bn
  2. Ahead of Tomorrow on WebTV: Discussions on Post COVID- 19; Attracting FDIs Into Nigeria
  3. Ahead of Tomorrow on WebTV: Discussions on Post COVID-19; How States Can Reposition Their Economies
  4. Making Hay While the Sun Has Set- LBS Executive Breakfast Session - May 2020
  5. Macroeconomic Outlook Update: COVID-19, Global Oil Price and the Nigerian Economy
  6. Nigerian Financial Institutions Remain Resilient To Economic Disruptions
  7. Nigeria Macroeconomic Markets Report for April 2020 - Inflation Continued Its Relentless Rise
  8. NOVA Monthly Economic Insight: Liquidity Pressure to Moderate Impact of Higher Borrowings
  9. Total Household Expenditure on Food and Non-food Was Put At N40.21bn in 2019 - NBS
  10. Ahead of Tomorrow on WebTV: Discussions on COVID-19; Driving Inclusive Economic Growth in Nigeria
  11. COVID-19 Pandemic and The Black Swan Metaphor - OpEd By Adefeko

Proshare Nigeria Pvt. Ltd.
Related News