The gross monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N647bn (US$1.77bn) in February (from January revenue). This was a decline of N69bn on the previous month.
The committee’s cursory statement in the local media last week revealed that receipts from import duty were significantly higher on the month, whereas those from petroleum profit tax, companies’ income tax, VAT, and oil and gas royalties decreased. The balance in the excess crude account declined from US$325m to US$72m over the month.
The gross payout consisted of the statutory allocation of N525bn, the VAT Pool of N105bn, a modest exchange-rate gain of N1bn and miscellaneous non-mineral revenue of N16bn. The fees and charges of the three tax collection agencies absorbed N24bn of the total declared.
The payout falls short of the recurrent spending needs of most states, let alone their capital requirements.
The communique noted a fall in inflows from the Federal Inland Revenue Service. Collection by the service is generally at its lowest in the first quarter.
The distribution will benefit from the rise in the standard rate of VAT from 5.0% to 7.5% with effect from this month. States receive 50% of the payout, local governments 35% and the FGN 15%.
|Revenue allocations (gross) by the FAAC (N bn)|
|Sources: Office of the accountant-general of the federation (OAGF); local media; CBN; FBNQuest Capital Research|
Money markets saw an inflow of N317bn last Friday, representing the net distribution to state and local governments. The FGN’s share is remitted directly to the treasury single account.
Full details of FAAC distributions are available on the OAGF website. The most recent, however, date from July 2019 (on June revenue).