The Federation Account Allocation Committee (FAAC) has shared the sum of ₦698.71 billion to Federal Government, State Governments and Local Governments as September allocation. This amount was from the federation revenue that accrued to Nigeria, in the month of September.
The amount shared in September shows a decline of ₦43.13 billion from the total of ₦741.84 billion shared for the three tiers of government in the previous month of August. The allocation was shared during the FAAC meeting held on Thursday night and presided over by the Minister of Finance, Mrs Zainab Ahmed.
Breakdown of the September Allocation
Details of the allocation show that after the cost of collection was deducted to the revenue generating agencies which include the Nigerian Customs, Department of Petroleum Resources (DPR), Federal Inland Revenue Service (FIRS). The Federal Government got ₦300.1 billion, ₦184.43 billion was shared to the 36 states, while the 774 Local Government Councils got ₦139.4 billion as September allocations.
Also, the sum of ₦59.09 billion was allocated by FAAC to the oil-producing states as 13% derivation principle.
Revenue is Falling
The gross statutory revenue for September was put at ₦569.28 billion, according to the communiqué signed by the Accountant General of the Federation (AGF), Ahmed Idris.
This was ₦57.85 billion lower than the revenue realised in August (₦627.13 billion). The Communiqué reads:
“Crude oil export sales increased by 0.17 million barrels, resulting in increased revenue to the federation of $8.48 million. However, the average unit price dropped from $77.10 to $75.69. There was shutdown of (crude oil) pipelines, which resulted in shut-in of production at the various pipelines.
“Revenue from royalties increased significantly, while Value Added Tax, Petroleum Profit Tax and Companies’ Income Tax decreased significantly.”
It will be recalled that, only two days ago, the Director of Budget in the Ministry of Budget and National Planning, Ben Akabueze, admitted that Nigeria is facing a deep revenue problem at the moment. He added that though Nigeria is earning more from crude oil export, but the overall revenue accrued to the nation is dwindling.
Why Is Revenue Dwindling
Though Nigeria now exports its crude oil at about $80 per barrel, it effectively imports the same crude back at about $100 price for refined petroleum products. Therefore, despite the strong oil prices, Nigeria is not seeing a corresponding growth in her revenue generation, as Nigeria is spending more to import virtually all the refined products from crude oil i.e. petrol, diesel and kerosene.
Another reason for the revenue shortage the country is currently facing is the fact that, the nation spends ₦55 to subsidise every litre of petrol consumed in Nigeria, through the NNPC.