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Economy & Politics

FAAC disburses N604 billion in November 2020 as allocation drops further

The sum of N604 billion was disbursed by the FAAC to the three tiers of government in November 2020.

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FG tasks state governments to embrace AfCFTA's economic opportunities

The Federation Account Allocation Committee (FAAC) disbursed the sum of N604 billion to the three tiers of government in November 2020 from the revenue generated in October 2020.

This is stated in the Federation Account Allocation Committee (FAAC) report for the month of November 2020, recently released by the National Bureau of Statistics (NBS).

According to the report, the monthly disbursement declined by 5.6% compared to N639.9 billion shared in October 2020 and 11.4% lower than N682.1 billion disbursed in September 2020.

READ: FAAC disburses N1.945 trillion in Q1 2020, highest Q1 allocation since 2014

Breakdown

  • The amount disbursed comprised of N377.15 billion from the Statutory Account, N72 billion from Distribution of FGN Intervention Fund, Distribution of N20 billion from Stabilization Account, N7.39 billion from FOREX Equalisation Account, and N1 billion from Excess Bank Charges Recovered.
  • The Federal Government received a sum of N231.29 billion from the total allocation of N604 billion. States received a total of N167.17 billion and Local governments received N124.71 billion, while the sum of N31.90 billion was shared among the oil-producing states as 13% derivation fund.
  • Also, revenue-generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS), and Department of Petroleum Resources (DPR) received N5.19 billion, N10.17 billion, and N3.87 billion respectively as cost of revenue collections.
  • Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) showed that the sum of N158.21 billion was disbursed to the FGN consolidated revenue account; N4.05 billion shared as share of derivation and ecology.
  • A sum of N2.03 billion was disbursed as stabilization fund; N6.81 billion for the development of natural resources; and N5.18 billion to the Federal Capital Territory (FCT) Abuja.

READ: House of Reps summon Emefiele, NNPC GMD over unremitted N3.24 trillion

 

States with highest net allocation

  • Delta State received the giant share in the month of November 2020, with a total allocation of N14.02 billion, representing 8.13% of the total disbursement.
  • Akwa Ibom followed with N10.82 billion (6.27%) closely followed by Rivers State with a total allocation of N10.01 billion (5.8%), Lagos State received N9.65 billion (5.6%) while Bayelsa received N6.76 billion (3.92%).
  • On the other hand, Cross River State received the lowest allocation of N2.49 billion, followed by Osun State with N2.55 billion, Plateau (N2.76 billion), Ogun State (N2.96 billion), and Ekiti State (N3.14 billion).

Debt deductions

  • A total of N6.45 billion was deducted from the allocations of the 36 states as part of external debt deductions.
  • Lagos State parted with N2.44 billion, the highest deduction compared to other states, Kaduna followed with N537.7 million, Oyo State (N378.7 million).
  • Others on the list of top five states include; Cross River (N311.3 million), and Rivers State with N227,1 million debt deduction.

READ: Nigerian banks issued N774.28 billion new loans in December 2020

Upshot

  • The federal allocation to the three tiers of government continues to decline on the back of reductions in government revenue, as a result of the crash in oil prices triggered by the Covid-19 pandemic and global oil price war.
  • Meanwhile, crude oil prices have rallied above $60 per barrel, signaling relief for the Nigerian government as oil revenue still constitute the larger chunk of its income.
  • However, it is imperative for state governments to strategize means of generating sufficient revenue internally so as to meet up with their various state obligations.

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Economy & Politics

Senate endorses ex-Service Chiefs as Non-career Ambassadors

The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.

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The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.

This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.

Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.

According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.

Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.

But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.

In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.

“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.

Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.

What you should know 

  • Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
  • Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
  • This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
  • They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.

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Economy & Politics

2020 budget performance: FG achieves 89% capital release in December 2020

The Minister of Finance has revealed that the FG achieved 89% release of the capital component of the 2020 budget to MDAs as of December 2020.

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The Minister of Finance, Budget and National Planning, Zainab Ahmed, has revealed that the Federal Government achieved 89% release of the capital component of the 2020 budget to Ministries, Departments and Agencies (MDAs) as of December 2020.

She said that the 89% capital funding for MDAs was achieved with the release of N1.74 trillion.

According to a report by the News Agency of Nigeria (NAN), this disclosure was made by Ahmed at an interactive session with the leadership of the National Assembly on Monday, February 22, 2021.

She also revealed that the government had disbursed N118.37 billion for Covid-19 capital expenditure from the fund.

READ: Recession: Senate attributes recovery to it’s cordial relationship with Executive

What the Minister for Finance is saying

Ahmed said the Nigerian economy faced serious challenges in 2020, with the macroeconomic environment significantly disrupted by the Covid-19 pandemic.

She said this led to a 65% drop in projected net 2020 government revenues from the oil and gas sector, which adversely affected foreign exchange inflows into the economy.

On the delayed release of funds to implement the 2020 capital budget until March 31, the Minister said the complaint had decreased.

She said, “I think the complaint was earlier in the year when we were trying to transfer the balances. As far as I know, in the past three weeks, I haven’t heard any such complaints and we have been able to address them.

“But when we started the transfers, we couldn’t transfer to some agencies because of some limitations in the system, but we have since been able to transfer the capital component that is being utilised by the agencies budget to the system.

READ: Nigeria receives $9.68 billion capital inflows in 2020, lowest in 4 years

While pointing out that the implementation of the MDAs projects was tied to procurement processes and capacity of the MDA, Ahmed also said the extension of the 2020 capital budget implementation to March 31 had recorded 30% performance as at January.

However, Ahmed said that she expected that the extension would record 100% performance in March.

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Speaking during the interaction, the Senate’s Chief Whip, Senator Orji-Uzor Kalu, commended the Minister on the capital performance of the 2020 budget.

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READ: FG to reopen Kano and Port Harcourt airports for international flights

He said, “I want to commend the minister and her team because this is the first time in the history of Nigeria that by December 31, we are having 89% performance expenditure of the budget. It has never happened before; Last year was the very first.

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“The budget had been going 49%, 27%; this means from what the Senate President was asking, it means by March, we should be looking at implementing the budget 100%.’

Earlier, President of the Senate, Ahmad Lawan said the meeting was to get an update on the capital implementation of the 2020 budget given its extension for implementation by the national assembly to March 31.

What this means

  • The 89% capital release for the 2020 budget as of December 2020 is quite encouraging as it occurred despite the economic challenges and disruption caused by the outbreak of the coronavirus pandemic.
  • There seems to be an improved effort by the Federal Government at the budgeting process with the early passage of the 2021 budget and the implementation of the capital component of the 2020 budget.

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