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Friday,
April 17, 2020 / 08:49 PM / by FBNQuest Research / Header Image
Credit: FBNQuest
We
learn from the local media that the gross monthly payout by the Federation
Account Allocation Committee (FAAC) to the three tiers of government amounted
to N582bn (US$1.51bn) in March (from February revenue). This was a decline of
N65bn on the previous month. The committee's brief statement following the
decision noted that receipts from petroleum profit tax, companies' income tax,
import and excise duty, oil and gas royalties, and VAT were all significantly
lower on the month. It added that the balance in the excess crude account (ECA)
remained a paltry US$72m.
The distribution followed an earlier unsuccessful meeting (Good
Morning Nigeria, 24 March 2020),
at which finance commissioners rejected the amount on offer. It would appear
that the distribution made was very similar, if not identical to the payout
earlier turned down. Mineral (oil) revenue has slumped, as we all know, and
non-oil GDP growth has disappointed.
The gross payout consisted of the statutory allocation of N466bn, the
VAT Pool of N100bn and exchange-rate adjustments of N16bn. The fees and charges
of the three tax collection agencies absorbed N22bn of the total declared.
The states received N204bn including the derivation bonus for the
oil-producers from FAAC in March. This is their largest source of revenue in
aggregate, representing almost two-thirds of their total inflows, and covered
just 58% of their average monthly spending in 2018. In the ideal world, all
states, not just a few, would have since been able to honour the new national
minimum wage and make a sizeable fiscal response to the onset of the
coronavirus pandemic.
Revenue allocations (gross) by the
FAAC (N bn) |
|
Sources: Office of the accountant-general of the
federation (OAGF); local media; CBN; FBNQuest Capital Research |
Full details of FAAC distributions are available on the OAGF website.
The most recent, however, date from July 2019 (on June revenue).
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