Buhari inaugurates new NEC, Monthly allocation, FAAC disbursed the sum, FG to review revenue sharing formula, Nigerian Oil Producing States

The Federation Account Allocation Committee (FAAC) disbursed the sum of N762.597 billion from the Federation Account to the three tiers of government in June 2019. This is according to the latest FAAC report released by the National Bureau of Statistics (NBS).

This was reportedly disclosed in a communique issued by the Technical sub-Committee of FAAC and signed by the Accountant-General of the Federation at the end of the meeting held in Abuja on Thursday.

The breakdown: The gross statutory revenue of N652.949 billion received for June is higher than the N571.731 billion received in the previous month. This means the gross statutory allocation received rose by N81.218 billion.

  • The amount disbursed comprises of N652.949 billion from the Statutory Account, N108.631 billion from Value-Added Tax (VAT),  as against N106.826 billion distributed in the preceding month, resulting in an increase of N1.805 billion.
  • Also, the total revenue distributable for the month of June included the Value-Added Tax which stood at N762.597 billion.

[READ MORE: Why the RUGA settlement initiative never made economic sense]

FG received the lion share: Further breakdown shows that from the net statutory revenue, the Federal Government got N309.433 billion, representing 52.68% the total gross allocation in June.

  • States governments received N201.157 billion or 26.72%.
  • Local governments got N151.384 billion and this represents 20.60% of the total.
  • The oil-producing states received N38.705 billion or 35% of total gross allocation as a 13% derivation revenue.
  • From the revenue available from the VAT, the Federal Government received N15.643 billion (15%), states got N52.143 billion (50%) and the local government councils received N36.500 billion (35%).

Slight relief for states? The slight increase in disbursement from the Federation Account will directly affect economic activities in most states, albeit in different magnitudes. The slight increase in allocation for the month under review is also expected to improve economic activities.

Meanwhile, as earlier reported, there are concerns as the rise in debts accruable to some states is seriously eating up into the allocation to the affected states. While debt is building up, only a few states in Nigeria have sufficient Internal Generated Revenue (IGR) enough to spur economic activities without the Federal Government’s monthly allocation.

According to the NBS report, state governments paid the sum of N3.14 billion debt in just one month. Also, the recent debt report released by the Debt Management Office (DMO) shows that all the 36 States accrued domestic debt of N3.97 trillion or US$12.9 billion as of the end of March 2019.

[READ FURTHER: State Governors parted with N33.9 billion to external debt deductions]

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