The Federation Account Allocation Committee (FAAC) has allocated the sum of N635.82 billion to the Federal, States and Local Governments across the nation as revenue for the month of November.
The allocation decreased from N702.05 billion that was shared in October and that represents N66.23 billion drop.
Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse, who confirmed the allocation, explained that the statutory revenue generated was N491.87 billion while the Value Added Tax and foreign exchange equalisation revenue was put at N53 billion.
He said, “The revenue that accrued from exchange gain was estimated at N785million during the period. After deducting the cost of collection of N16.27 billion to the Federal Inland Revenue Service, the Federal Government received N267.88 billion.”
On the breakdown, Isa-Dutse added that state governments got N172.56 billion, while local governments received N129.97 billion.
“The sum of N49.12 billion was allocated to the oil-producing states based on the 13% derivation principle. The gross revenue of N491.87 billion received for the month was lower than the N596.04 billion received in the previous month by N104.16 billion.
“Revenues from Companies Income Tax, Value Added Tax, import duty, royalties, Petroleum Profit Tax all decreased significantly while excise duty increased marginally. The balance in the Excess Crude Account closed at $324.96 million,” he said.
Meanwhile, Nairametrics had reported that the federal allocation to States and LGAs in Nigeria also dropped to N327.68 billion in September 2019, from the N331.57 billion disbursed in the previous month (August). This means allocation dropped by 1.17%.
Revenue Concerns: In the light of declining federal allocation revenue and growing debt stock of states, a quick check at the IGR numbers for half-year 2019 showed that some states in Nigeria borrowed over 700% of revenue generated within just 6 months.
- This implies that several states in Nigeria are technically bankrupt without debt financing and Federal Government monthly allocation.
- Also, the decline in FAAC could imply that there will be pressure on the government to use borrowing to fund recurrent expenditure instead of highly craved capital expenditure which is almost becoming the norm with state governments.