Tuesday, May 19, 2015 11:10 AM / FBN Capital Research
Friday’s monthly statement by the accountant-general on gross revenue distributions by the Federation Account Allocation Committee (FAAC) to the three tiers of government made for depressing reading. The total of N388bn (US$1.95bn) in April revenues due for distribution this month compares with N685bn one year earlier and N851bn (US$5.22bn at the then interbank exchange rate) at the beginning of the oil price slide in June 2014.
The rapid decline in monthly distributions has led to the accumulation of salary arrears at state and federal government levels. Capital releases by the FGN have also fallen in consequence. In March the federal minister for works warned that his allocation in the 2015 budget proposals had been slashed from N100bn to just N11bn.
The monthly distributions are paid from gross federally collectible revenues less set transfers and deductions (Good Morning Nigeria, 08 May 2015).
The statutory amount (in the table) includes the derivation payment (to oil-producing states) but excludes items such as the VAT pool, exchange-rate gains, NNPC refunds and a share of the subsidy reinvestment and empowerment programme (SURE-P)
This was the final meeting of the FAAC under the outgoing administration. There have been suggestions that its replacement will discontinue the fuel subsidy (and thus SURE-P). It may also revisit the programme of NNPC refunds (on earlier underpayments) and the rate of indirect taxes such as VAT,