The Federation Account Allocation Committee (FAAC) disbursed the sum of N601.11 billion to the three tiers of government in December 2020 from the revenue generated in November 2020.
This is according to the FAAC report of December 2020, recently released by the National Bureau of Statistics (NBS).
The amount disbursed represents a 0.48% decrease when compared to N604 billion disbursed in November 2020. Checks by Nairametrics shows that December 2020 disbursement was the lowest allocation in the second half of 2020.
- The amount disbursed comprised of N436.46 billion from the Statutory Account, N7.87 billion from FOREX Equalisation Account, and N156.79 billion from Value Added Tax.
- Federal Government received a total of N215.6 billion, representing 35.9% of the total allocation, States received a total of N171.17 billion (28.5%), while Local Governments received N126.79 billion (21.1%).
- Also, the sum of N31.39 billion was shared among the oil
producing states as 13% derivation fund.
- Meanwhile, revenue-generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service
(FIRS), and Department of Petroleum Resources (DPR) received N7.87 billion, N9.41 billion, and N3.98 billion respectively as cost of revenue collections.
A further breakdown showed that the sum of N143.82 billion was disbursed to the FGN consolidated revenue account; N3.68 billion shared as share of derivation and ecology; N1.84 billion as stabilization fund; N6.18 billion for the development of natural resources; and N5.08bn to the Federal Capital Territory (FCT) Abuja.
South-South region received the giant share
Out of the six geo-political zones in the country, the south-south region received the largest share of the total allocation.
- South-South states received a sum of N48.03 billion in December 2020, representing 26.8% of the total state disbursement.
- North West followed with an allocation of N32.8 billion, accounting for 18.3%, while South West received a sum of N29.31 billion (16.3%).
- Also, North Central received N26.59 billion (14.8%), North East N22.74 billion (12.7%), and South East received N19.92 billion (11.1%).
- It is worth noting that Delta State led the list of states with the highest allocation in December 2020, with a sum of N13.48 billion, closely followed by Lagos State with a sum of N12.46 billion).
- Others on the list include; Akwa Ibom state (N10.48 billion ), Rivers (N10.11 billion), and Bayelsa (N6.82 billion).
External debt deductions
A total of N6.45 billion was deducted from the allocations of the 36 states as part of external debt deductions in the month of December 2020.
- 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.
As states continue to struggle to meet their financial obligations due to the covid lockdown in 2020, a reduction in revenue allocation from the Federal Government could further compound their financial difficulties. However, it should serve as a challenge to the various state governments to seriously consider and put in place strategy to increase their internally generated fund to aid self-sustainability.
Transport fare watch: Motorcycle “Okada” commuters paid less in January 2021
Commuters on motorcycle per drop (Okada) paid less in January 2021 than they did in December 2020.
The average fare paid by commuters for journey by motorcycle per drop decreased by 11.60% month-on-month and increased by 95.22% year-on-year to N259.33 in January 2021 from N293.36 in December 2020, according to the National Bureau of Statistics (NBS) report for the month of January 2021.
According to the report, commuters in Taraba (N400.80), Yobe (N400.15) and Rivers (N400.00) paid the highest journey fare by motorcycle per drop while commuters in Adamawa (N84.22), Katsina (N134.90) and Kebbi (N152.05) paid the lowest journey fare by motorcycle per drop.
Other key highlights
- The average fare paid by commuters for bus journey intercity decreased by 0.25% month-on-month and increased by 39.55% year-on-year to N2,346.41 in January 2021 from N2,352.19 in December 2020.
- Commuters in Abuja FCT (N4,482.24), Lagos (N3,300.23) and Sokoto (N3,300.00) paid the highest bus journey fare intercity while commuters in Bayelsa (N1,600.45), Bauchi (N1,640.20) and Enugu (N1,687.45) paid the lowest bus journey fare within city.
- The average fare paid by commuters for bus journey within the city decreased by 0.66% month-on-month and increased by 74.75% year-on-year to N352.15 in January 2021 from N354.49 in December 2020.
- Commuters in Zamfara (N600.00), Bauchi (N522.75) and Ekiti (N458.77) paid the highest bus journey fare within city while commuters in Oyo (N189.46), Abia (N205.22) and Borno (N240.79) paid the lowest bus journey fare within city.
- The average fare paid by air passengers for specified routes single journey increased by 0.02% month-on-month and by 18.27% year-on-year to N36,463.65 in January 2021 from N36,454.59 in December 2020.
- Passengers in Anambra (N38,600.00), Cross River/Jigawa/Lagos (N38,500.00), Bauchi (N38,400.00) paid the highest airfare while States with lowest airfare were Akwa Ibom (N32,450.00), Sokoto (N33,700.00), and Gombe (N35,000.00).
- The average fare paid by passengers for water way passenger transport increased by 3.68% month-on-month and by 38.58% year-on-year to N786.19 in January 2021 from N758.27 in December 2020.
- Passengers in Rivers (N2,280.00), Delta (N2,250.45) and Bayelsa (N2,200.10) paid the highest fare by water while states with lowest fare by waterway passenger transport were Borno (N245.10), Gombe (N290.77) and Kebbi (N340.00).
Why this matters
Transportation cost takes a huge portion of budget for most lower/middle-class Nigerians and as well takes not less than 20% of their take-home pay packages.
The drop in fares paid by the commuters on motorcycle per drop (Okada) is a welcome development.
Transport by motorcycle (Okada) has been popularly adopted in most cities by businessmen, government workers, and students to overcome traffic congestion, and for the advantage that it can navigate roads that are inaccessible to automobiles and buses, particularly in villages and urban slums.
The moment Emefiele predicted Nigeria will be out of recession in Q4 2020
The CBN Governor had expressed optimism last year that the country was going to come out of recession in Q4 of 2020.
It is no longer news that Nigeria, Africa’s largest economy, against all expectations exited recession as its Gross Domestic Product (GDP) grew by 0.11% in the last quarter of 2020 (year on year).
However, the Governor of the Central Bank of Nigeria, Godwin Emefiele, had expressed optimism last year that the country was going to come out of recession in the fourth quarter of 2020.
According to the report released by the National Bureau of Statistics (NBS), this is the first positive quarterly growth in the last 3 quarters following growth in telecommunications and agriculture which seem to make up for the sharp drop in oil prices and production.
The surprising rebound of the Nigerian economy is coming against the prediction of the country’s Minister for Finance, Budget and National Planning, Zainab Ahmed, who while speaking at the 26th Nigerian Economic Summit, said that Nigeria is expected to exit recession by the first quarter of 2021.
The CBN Governor had during the November 2020 Monetary Policy Committee meeting, predicted that the country was going to come out of recession by the fourth quarter of 2020.
This as he said that many analysts expressed doubts about that and were waiting to prove him wrong.
In a video during a press conference as seen by Nairametrics, Emefiele said, “You said that in November MPC, I was cautiously optimistic that fourth-quarter GDP will be positive thereby taking Nigeria out of a recession that I was aggressively optimistic that during the first quarter, we will exit recession. I am praying very seriously that my prayer should be heard because I know that people are waiting to put my neck on the chopping board to say that I do not know my work.’’
What you should know
- Despite Nigeria’s surprise exit from recession, experts have still expressed their reservations about the country’s weak economy which is faced with several challenges for businesses ranging from foreign exchange pressure, high unemployment level, increasing consumer prices, serious security challenges, weak investor confidence, etc.
- This is as the growth in GDP was primarily driven by the Information and Communication sector and the Agricultural sector.
- However, the surprise rebound of the economy means that Nigeria may recover faster than expected as crude oil prices and production increase this year.
- This also shows that the country needs to redouble its efforts in the growth of the non-oil sector which contributed 94.13% to Nigeria’s GDP.
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