Thursday, July 28, 2016 9:25am/
The total monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government picked up by N254bn to N559bn (US$1.69bn) in July (from June revenues).
This was the highest for more than one year other than the distribution of N924bn in June 2015, boosted by a Nigeria LNG dividend. More importantly, it exceeds the projected pro rata monthly average of N477bn per the 2016 budget, which projects the net distribution from the federation account and the VAT pool combined at N5.72trn.
The healthy improvement was attributed by Kemi Adeosun, the federal finance minister, to stronger collection of non-oil dues by the Federal Inland Revenue Service. She highlighted a month-on-month rise of N165bn in collection by the service. We recall a bullish progress report by its chair (Good Morning Nigeria, 21 July 2016).
The minister also reported a modest increase in collection by the customs service, which we put in the negative context of falling import demand as well as the CBN circular covering the 41 import items.
If the overall positive trend is to continue, and we feel that it will, this provides some relief from the impact of sabotage on oil earnings in the federation account. There is also the prospect that state governments will be able to meet their current salary obligations and so underpin household demand.
One report quotes Adeosun as noting an increase in the balance in the excess crude account to US$3.9bn as at 20 July from US$2.3bn one month earlier. While small, this is nonetheless the first rise in the balance for many months.
We have taken the data for July from the local media and caution that there are some inconsistencies between different accounts.
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