Business & Finance

FG, States and Local Governments share N547 billion in June

The Federal Account Allocation Committee (FAAC) shared in June 2020, the sum of N547.3 billion to the Federal government,

FG, States and Local Governments share N547 billion in June

The Federal Account Allocation Committee (FAAC) shared in June 2020, the sum of N547.3 billion to the Federal government, States and Local Government Areas, being the monthly allocation from the revenue generated in the month of May 2020. This was disclosed in the latest FAAC disbursement report, released by the National Bureau of Statistics (NBS).

According to the report, the monthly allocation declined by 9.7% compared to N606.2 billion shared in May and 29.9% lower than N780.93 billion shared in April 2020.

Breakdown

  • The amount disbursed comprised of N413.95 billion from the Statutory Account, N103.87 billion from Valued Added Tax (VAT), N1.01 billion from Excess Bank Charges Recovered for the Month and N28.47 billion Exchange Gain Differences.
  • The Federal Government received a total of N219.80 billion from the N547.31 billion, accounting for 40.2% of the total disbursement. States received a total of N152.47 billion and Local Governments received N114.09bn. The sum of N37.02bn was shared among the oil-producing states as 13% derivation fund.
  • Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.24 billion, N7.09 billion and N1.98 billion respectively as cost of revenue collections for the month of May 2020.

Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that the sum of N161.74 billion was disbursed to the FGN consolidated revenue account; N3.90 billion shared as share of derivation and ecology; N1.95 billion as stabilization fund; N6.55 billion for the development of natural resources; and N4.82 billion to the Federal Capital Territory (FCT) Abuja.


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States allocation

In the month of June 2020, Delta State received the biggest share of N14.3 billion net allocation, followed by Akwa Ibom with a total net allocation of N11.4 billion. Other states that made the top 5 with biggest allocation include Rivers (N10.7 billion), Bayelsa (N8.93 billion), and Lagos (N7.4 billion).

On the other hand, Osun State received the lowest share (N2.24 billion) followed by Cross River with N2.26 billion net allocation. Others include; Plateau (N2.48 billion), Ogun (N2.75 billion) and Gombe State received N2.84 billion.

Back story

fabpulse reported last week that The Federation Account Allocation Committee (FAAC) disbursed the sum of N606.2 billion to the three tiers of government in May 2020, from the revenue generated in the previous month.

  • In May 2020, the federal government received the highest share of N255.1 billion (42.1%) from the total disbursement, States received a total of N166.63 billion while local governments received N125.4 billion.
  • Oil-producing states received N37.4 billion as part of the 13% derivation fund.

Upshot

From this latest report, it is evident that Nigeria is having less revenue to share to the arms of the government, as FAAC disbursement has consistently reduced due to the effect of COVID-19 pandemic, which was characterised by lockdown and economic disruptions. With the global oil price picking up, it is expected that Nigeria could improve its oil revenue and have more funds to share from the federal bourse.

However, it is high time for the various states and local governments to devise means of improving its fiscal revenue in order to effectively finance the public sector.

 

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