The Federation Account Allocation Committee (FAAC) disbursed the sum of N660.37bn to the three tiers of government in February 2019. This is revealed in the FAAC report released by the National Bureau of Statistics (NBS).
The latest FAAC report shows revenue allocation increased by 2% in February 2019. In January 2019, N649.19 was disturbed, as against 660.37 disbursed in February.
- The amount disbursed comprised of N497.12bn from the Statutory Account, N104.47bn from Valued Added Tax (VAT), N8.12bn as excess charges recovered, N50bn distributed as FOREX Equalisation Fund and N654.70m exchange gain differences.
- Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.66bn, N7.62bn, and N4.07bn respectively as the cost of revenue collections.
- Delta, Akwa Ibom, and Lagos States received the highest gross allocation for the month
- Ekiti, Ebonyi and Kwara States received the lowest gross allocation for the month
Federal Government received highest 42% allocation among the three tiers
The Bureau’s report shows that the Federal Government received a total of N275.33bn from the N660.37bn. All States across the federation received a total of N182.17bn and Local Governments received N136.88bn. The sum of N48.49bn was shared among the oil-producing states as 13% derivation fund.
Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that the sum of N221.33bn was disbursed to the FGN consolidated revenue account; N4.94bn shared as share of derivation and ecology; N2.47bn as stabilization fund; N8.30bn for the development of natural resources; and N5.90bn to the Federal Capital Territory (FCT) Abuja.
Delta tops five states with the highest allocation
In February 2019, Delta tops the list of states with the highest gross revenue allocation with N19.8 billion. Followed by Akwa Ibom with N15.67 billion and Lagos state ranked third with N14.2 billion allocation for the review period. However, Rivers and Bayelsa ranked 4th and 5th highest receiver of revenue with 13.97 billion and 13.16 billion respectively.
However, Kwara State received lowest revenue allocation
Bureau’s report shows that Kwara State received the lowest revenue allocation with N4.06 billion for the month of February. Also, Ebonyi and Ekiti two other states that received the lowest revenue allocation for the month February with N4.07 billion and N4.08 billion respectively.
Lagos State received highest VAT allocation of 17%
For the review period, Lagos State received N8.5 billion from VAT allocation, and this represents 17% of the total VAT revenue generated in January 2019.
From VAT allocation, Taraba, Nassarawa and Bayelsa received the lowest VAT allocation with N952.8 million, N942.86 million and N901 million respectively.
What this means for the economy?
Other things being equal, the improvement in FAAC for the month of February implies that economic activities are likely improve also. Increase in FAAC disbursement means governments at all levels have more funds to use for various recurrent and capital expenditures is expected to spill its ripple effect to sectors of the economy.