Monday, December 21, 2015 09:12 AM / FBNQuest Research
According to the federal finance ministry, the total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government increased to N474bn (US$2.39bn) out of October revenues from N390bn out of September’s inflows.
The ministry attributed the improvement to collections in the non-oil economy and noted the negative impact of shut-ins in the oil industry. It cited an average oil price of US$47.0/b in October, compared with US$47.3/b the previous month. The price has since taken a further leg downwards of roughly US$10/b.
Distributions by the FAAC now amount to N5.06trn ytd through to October. The FGN’s 2016-18 Medium-Term Expenditure Framework projects a total of N5.72trn for next year, rising sharply to N7.63trn in 2017.
The ministry’s statement on the distribution of October revenues touched upon the recovery of looted monies. Kemi Adeosun, the new finance minister, declined to indicate the FGN’s expectations from this source but reportedly indicated that any recoveries will not be shared out by the FAAC but returned whence they came.
The same statement quoted Adeosun as estimating the balance in the excess crude account (ECA) at US$2.26bn, virtually unchanged over several months. The recent decision by the FGN to clear a large backlog of overdue payments to the fuel marketers is to be met from the 2015 supplementary budget rather than from drawing from the ECA.
10. Further decline in FAAC distributions – May 19, 2015