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.
- 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.
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.
Nairametrics 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.
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.
Insecurity: FG to implement town hall meetings to reach a national consensus
The meetings are set to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
The Federal Government announced the launch of town hall meetings to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
This was disclosed by the Minister of Information, Lai Mohammed, at the Town Hall Meeting in Kaduna on Thursday, themed “Setting Benchmarks for Enhanced Security and National Unity in Nigeria.”
What the Minister is saying
“The correct starting point towards addressing these myriads of problems is the building of an “elite consensus” on the security, unity, indissolubility, and peaceful existence of Nigeria.
“Such elite consensus had worked in the past. Can we make it work now and proffer solutions in order to stave off the threats to our unity as a nation?” he said.
The Minister disclosed that the meetings are necessary to bring all critical stakeholders together to deliberate on the issues and possibly reach a consensus on the way forward.
“We expect this Town Hall meeting to develop concrete, implementable resolutions because a lot of talks and postulations had taken place with little or no requisite outcome.”
In case you missed it
- Former Vice President, Atiku Abubakar warned that the rising insecurity in Nigeria is a result of rising youth unemployment. He urged Nigeria to tackle out-of-school children cases, pay a monthly stipend to poorer families, incorporate youths who are above school age into massive public works programmes and others.
- Senator Ali Ndume insisted that the Federal Government needs to increase its total military spending to be able to tackle the rising insecurity in Nigeria which has seen a number of school students in 2021 kidnapped by bandits.
IMF lifts 2021 global GDP growth to 6%
The group also warned that economic recoveries are diverging dangerously across and within countries.
The International Monetary Fund has lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020 due to the effects of the COVID-19 pandemic. This disclosure was made on the organisation’s website on Tuesday.
The group also warned that economic recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well.
What the IMF is saying
“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic.
China is projected to grow this year at 8.4 percent. While China’s economy had already returned to pre-pandemic GDP in 2020, many other countries are not expected to do so until 2023.”
On divergent recoveries
The IMF stated that divergent recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations.
“The average annual loss in per capita GDP over 2020–24, relative to pre-pandemic forecasts, is projected to be 5.7 percent in low-income countries and 4.7 percent in emerging markets, while in advanced economies the losses are expected to be smaller at 2.3 percent,” they said.
“Faster progress with vaccinations can uplift the forecast, while a more prolonged pandemic with virus variants that evade vaccines can lead to a sharp downgrade. Multispeed recoveries could pose financial risks if interest rates in the United States rise further in unexpected ways.“
For Africa, IMF forecasts economic growth of 3.4% in 2021 and 4% by 2022, Nigeria is expected to grow by 2.5% in 2021 and 2.3% by 2022, while South Africa is projected to hit growths of 3.1% and 2.0% for the respective years in focus.
In case you missed it
The International Monetary Fund (IMF) identified some factors that hamper the economic recovery of low-income countries from the devastating impact of the coronavirus pandemic, factors including access to vaccines, limited policy space to respond to the crisis, the lack of means for extra spending, pre-existing vulnerabilities such as high levels of public debt in many low-income countries and sometimes weak, negative, total factor productivity performance in some low-income countries. These factors continue to act as a drag on growth.
Nairametrics | Company Earnings
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- Union Homes REIT proposes final dividend worth N465.03 million for shareholders.
- GT Bank Plc holds FY 2020 investors presentation.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.