An Uptick in FAAC Distribution in January 2022


Thursday, January 27, 2022 / 09:10 AM / by FBNQuest Research / Header Image Credit: Johan10; iStock

Our chart today shows that the gross monthly distribution by the Federation Account Allocation Committee (FAAC) distributed to the three tiers of government amounted to NGN700bn (c.USD1.69bn) in January (from December revenue). This represents a 3.5% (NGN24bn) increase over the previous month's payout. The increase recorded is due to a rise in takes from companies' income tax and value added tax (VAT).  Collections from petroleum profit tax (PPT) and oil and gas royalties decreased significantly, while the take from import and excise duties recorded a marginal decrease. The federal government received NGN79bn, c.NGN18bn lower than its share in December. The gross distribution to state governments decreased by -1% m/m to NGN257bn, including NGN35bn which represents the 13% derivation for oil-producing states. The local governments' share rose by NGN8m to NGN164bn.

The headline figure is made up of NGN507bn in gross statutory distribution, NGN187bn from the VAT pool, and fx adjustments totalling NGN5bn. 

According to the committee, the balance in the Excess Crude Account (ECA) as of January '21 remained at USD35.4m.

Of the total distribution, NGN30bn was spent on cost of collection while the total deductions for statutory transfers, refunds and savings amounted to NGN37bn.

The NNPC disclosed in its FAAC report for last month that a total of NGN271bn in value shortfall (fuel subsidy claims) was to be deducted from January's FAAC remittance. On Monday, the FGN announced the suspension of petrol subsidy removal "till further notice". We had expected that the complete deregulation of petroleum products slated for H2 '22 would ease the burden of these value shortfalls on the NNPC.

Higher oil prices are likely to remain high this year. Significant subsidy cost and oil production challenges limit the country's ability to maximise the benefits of rising oil prices.

In 2021, FAAC payout averaged NGN677bn. The corresponding figures for 2020 and 2019 are NGN636bn and NGN685bn respectively.

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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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