Thursday, January 28, 2016 08:53 AM / FBNQuest Research
The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government in January (from December revenues) picked up marginally to N388bn (US$1.97bn) from N370bn the previous month.
We return to the committee’s work so soon after our last commentary (on Tuesday) because it has announced its latest monthly distribution, albeit behind schedule. While the amount for disbursement this month has picked up by N18bn, it was still the second lowest over a 12-month period.
The net distribution from the federation account and the VAT pool combined is projected at N5.72trn this year in the expenditure framework document for 2016-2018. January’s of N388bn (from December revenues) was well short of the pro-rata monthly average of N477bn.
We suspect that the underperformance lies mostly on the non-mineral (non-oil) side. These revenue collection targets are challenging, amounting to 40% on those for non-oil in the 2015 budget. The monetary policy committee (MPC) appeared to suggest as such in this week’s communiqué.
The non-statutory element of the latest total includes the set N6.3bn monthly refund from the NNPC. On the conclusion of these payments, we would expect a new schedule to be drawn up by the FGN.
The federal finance ministry announced after the FAAC meeting on Tuesday that the balance in the excess crude account had remained US$2.25bn since July 2015.
12. Further decline in FAAC distributions – May 19, 2015