Another Decline in the FAAC Payout; Amount to N547bn in June 2020

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Monday, June 22 , 2020 / 08:49 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 N547bn (US$1.42bn) in June (from May revenue). This was a decline of N59bn on the previous month's payment. From the sparse coverage in the local media last week we learnt that that receipts from petroleum profit tax, VAT (N104bn vs N94bn) and import duty were higher on the month, and those from companies' income tax, oil royalties and excise duty all lower. State governments received a total of N189bn including the 13% derivation formula for those classified as oil producers.


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The previous total distribution included, we assume, a sizeable exchange-rate gain on the back of the CBN's adjustment to the official/preferential rate from N307 per US dollar to N360 on 20 March.

 

While the previous total was higher, the statutory allocation of N370bn has been bettered by the latest N414bn. This may reflect the impact of the easing of lockdown in the principal urban centres with effect from the first week of May. 

 

The next two distributions are likely to be lower. Nigerian crude is generally sold three months forwards, and 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.

 

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

 

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

 

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 the next payout. The stabilization fund, one of three managed by the authority, is designed to respond to shocks such as that created by Covid-19.

 

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Related Links

  1. FAAC Disburses N780.93bn in April 2020 - NBS
  2. FAAC Disburses N581.57bn in March 2020 - NBS
  3. FAAC Disburses N647.35bn in February 2020 - NBS
  4. FAAC Disburses N716.30bn in January 2020 - NBS
  5. FAAC Disburses N2.93trn to FG in 2019 - NBS
  6. FAAC Disburses N650.83bn in December 2019 - NBS
  7. FAAC Disburses N702.02bn in November 2019 - NBS
  8. FAAC Disburses N693.52bn in October 2019 - NBS
  9. FAAC Disburses N740.87bn in September 2019 - NBS

 

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