The three tiers of government have continued to enjoy increased revenue flow from the nation’s commonwealth as the Federal Accounts Allocation Committee in 10 months ended October, 2021, disbursed about N6.7trillion to them. BUSAYO SAMUEL reports.
The amount shared by the three tiers of government increased by N1.8trillion or 39.6 per cent in 10 months compared to N4.67trillion shared in full year 2020, investigations by The Point has revealed.
FAAC allocation was boosted by 6.17 per cent to N739.97billion from N696.97billion in September.
The distribution, which opened with N619.34billion in January of 2021 increased gradually to N739.97billion in October.
Revenue recorded a significant turnaround from July when it hit the N700billion mark from N600billion maintained from January till June.
From July, the three tiers of government enjoyed increased revenue as FAAC hit N733.1billion. The figure increased further to N760.7billion in August by 3.8 per cent but dropped to N697billion in September before climbing by 6.2 per cent to about N740billion in October.
Analysts have predicted that FAAC may likely continue its upward trend to N780billion in November on higher oil prices.
The increase in revenue has been attributed to increase in oil revenue in the ongoing fiscal year. Specifically, petroleum profit tax, oil and gas royalties and excise duty increased significantly in the review period while companies’ income tax, VAT and import duty decreased marginally.
The Managing Director/Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, commenting on the trend, said FAAC was likely to continue its upward trend in November on higher oil prices.
Rewane noted that global demand/supply imbalance in the oil industry would continue to push prices upwards, even as Nigerian oil output finally climbed by 11.5 per cent to 1.45mbpd in September from 1.3mbpd in August.
Brent averaged $83.71pb, 10.55 per cent above $74.88pb in September.
The FDC boss further explained, “Oil prices rallied above $86pb highest level since October 2018 and could touch $90pb on ongoing energy crisis ahead of winter.
“Higher oil prices to increase fuel subsidy payments currently estimated at N3.7bn daily and it will likely reduce NNPC’s remittance to FAAC.”
October Allocation
The FAAC shared a total of N739.965 billion September 2021 federation account revenue to the Federal, States and Local Governments Councils at the end of the virtual meeting of FAAC for October, 2021.
The N739.965 billion total Distributable Revenue comprised distributable Statutory Revenue of N577.765 billion, distributable Value Added Tax revenue of N159.096 billion and Exchange Gain of N3.104 billion.
In September 2021, the sum of N126.272 billion was the total deductions for cost of collection, statutory transfers, savings and refunds.
The balance in the Excess Crude Account was $60.860 million.
From the total Distributable Revenue of N739.965 billion, the Federal Government received N301.311 billion, the State Governments received N220.272 billion, and the Local Government Councils received N164.176 billion.
“According to the National Bureau of Statistics, in the first quarter of 2021, the internally generated revenue was N398.26 billion while in the second quarter it amounted to N450.86billion
“
The sum of N54.206 billion was shared to the relevant States as 13 per cent derivation revenue.
The distributable Statutory Revenue of N577.765 billion was available for the month. From this amount, the Federal Government received N276.008 billion, the State Governments received N139.995 billion and the Local Government Councils received N107.930 billion. The sum of N53.831billion was given to the relevant States as 13 per cent derivation revenue.
In September 2021, the gross revenue available from the Value Added Tax was N170.850 billion. This was lower than the N178.509 billion available in the month of August by N7.659billion.
The sum of N4.920 billion allocation to NEDC and N6.834 billion cost of revenue collection were deducted from the N170.850 billion gross Value Added Tax revenue, resulting in the distributable VAT revenue of N159.096billion.
From the N159.096billion distributable VAT revenue, the Federal Government received N23.864 billion, the State Governments received N79.548 billion and the Local Government Councils received N55.684 billion.
The Federal Government received N1.438 billion from the Exchange Gain revenue of N3.104 billion. The State Governments received N0.729 billion, the Local Government Councils received N0.562 billion and N0.375 billion was shared to the relevant States as 13 per cent derivation revenue.
According to FAAC, in the month of September 2021, Petroleum Profit Tax, Oil and Gas Royalties and Excise Duty increased significantly while Companies Income Tax, VAT and Import Duty decreased marginally.
FAAC 2020
Comparatively, government revenue generation capacity has recorded an appreciable increase in fiscal year 2021 as FAAC received a boost of about 40 per cent from N4.79trillion as at December 31, 2020 to N6.7trillion as of October 31, 2021.
“According to FAAC, in the month of September 2021, Petroleum Profit Tax, Oil and Gas Royalties and Excise Duty increased significantly while Companies Income Tax, VAT and Import Duty decreased marginally
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A review of disbursements in full year 2020 showed that the FAAC disbursed the sum of N2.49trillion to the Federal Government of Nigeria in 2020 while states received a total of N2.30trillion within the period under review.
The months with the highest Net Allocation were January and August with N243.45billion and N232.34billion, respectively, while the least amount disbursed to the Federal Government of Nigeria in 2020 were in December and November with N160.59billion and N176.29billion respectively.
The total Net FAAC Allocation to State Government stood at N2.30trillion, Delta and Akwa Ibom States received the highest allocation of N186.83billion and N146.27billion respectively in 2020 while Osun and Cross River States received the least allocation of N30.63billion and N32.89billion in that order.
IGR
Efforts by sub-nationals to generate revenue internally received a boost as total cash that accrued to the states stood at N849.12billion in half year of 2021.
According to the National Bureau of Statistics, in the first quarter of 2021, the internally generated revenue was N398.26 billion while in the second quarter, it amounted to N450.86billion.
This indicates a positive growth of 13.21 per cent. Lagos State has the highest Internally Generated Revenue with N267.23 billion in H1 2021, followed by FCT with N69.07billion and Rivers State with N57.32 billion, while Yobe State followed with N4.03 billion recorded the least.
