Tuesday, March 29, 2016 8:55AM /FBNQuest Research
The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government in March (from February revenues) declined to N345bn (US$1.73bn) from N370bn the previous month.
The decline was attributed to vandalism at Escravos terminal as well as force majeure declared at Brass terminal which led to the shutdown of pipelines at other terminals for repairs and maintenance.
The federal minister of finance, Mrs Adeosun, also blamed the decline on the substantial drop in revenue from oil and gas royalty, companies’ income tax and import duty.
According to the 2016-18 Expenditure Framework the net distribution from the federation account and the VAT pool combined is projected at N5.72bn this year. The payout this month fell below the projected pro rata monthly average of N477bn.
The federal finance ministry announced after the FAAC meeting on Tuesday that the balance in the excess crude account increased very marginally to US$2.259bn from US$2.258 previously recorded.
The crude oil price averaged US$34.2/b in February, compared with US$33.7/b the previous month.
There are initiatives that are currently in the pipeline to boost non-oil revenue collection. Lagos, the model state, recently announced plans to extend its tax remittance to include domestic workers and artisans.
The Lagos State Internal Revenue Service is currently working on how to engage the informal sector to ensure voluntary compliance.
3. Declining Federal Allocation Mounting Pressure on the States – Jan 19, 2016
12. Further decline in FAAC distributions – May 19, 2015