- FAAC disburses N1.35trn to three tiers of government in November 2023
Nigeria’s inflation rate rose to its highest in more than 27 years in December as food prices surged, exacerbating a cost-of-living crisis and piling more pressure on the Central Bank of Nigeria to raise interest rates.
Consumer inflation rose for the 12th straight month in December to 28.92% year-on-year from November’s 28.20%, the National Bureau of Statistics said on Monday.
Inflation in Nigeria has not climbed this high since mid-1996.
The food inflation rate, which accounts for the bulk of Nigeria’s inflation basket, rose to 33.93% in December from 32.84% a month earlier.
The statistics office said prices rose for a broad range of food items including bread and cereals, oil, fish, meat, fruit and eggs.
Analysts say higher fuel prices and a weaker naira currency have also stoked price pressures.
Africa economist at Capital Economics, David Omojomolo, said “inflationary pressures are only likely to build from here,” citing second-round effects from the removal of a fuel subsidy last year and naira weakness.
He predicted that inflation would breach 30% by the end of the first quarter and said it was unlikely to peak until the middle of 2024.
President Bola Tinubu last May embarked on Nigeria’s boldest reforms in decades by scrapping a costly but popular fuel subsidy and devaluing the currency to try to revive economic growth.
But growth is yet to pick up while inflation has worsened.
The CBN Governor, Olayemi Cardoso, is yet to hold a rate-setting meeting since taking office in September.
“At the next meeting, we think that the CBN will need to raise rates by 400 basis points, to 22.75%, to show that it is taking the inflation fight more seriously.
“There’s a clear risk, though, the CBN underwhelms again. Doing so would undermine much of the momentum and optimism around the policy shift that President Tinubu started last year,” Omojomolo said in a research note.
FAAC disburses N1.35trn to three tiers of government in November 2023
The Federation Account Allocation Committee distributed a total of N1.35 trillion to the three tiers of the Nigerian government in November 2023, derived from the revenue generated in October 2023, according to the latest data from the National Bureau of Statistics.
This disbursement, a critical facet of the nation’s financial landscape, reflects the diverse sources contributing to the robust fiscal framework.
The highest contributions to the disbursed amount include N509 billion from the Statutory Account, N289 billion from exchange rate gain, N300 billion from Non-Oil Revenue, N120 billion from the Electronic Money Transfer Levy and N134 billion from Value Added Tax.
These contributions signify the multifaceted nature of revenue streams contributing to the government’s coffers.
The allocations for November 2023 were apportioned as follows: the Federal Government received a total of N323.35 billion, the States secured N307.72 billion, and the Local Governments obtained N225.21 billion.
Additionally, N50.67 billion was shared among oil-producing states as part of the 13 percent derivation fund.
Further, revenue-generating agencies played a pivotal role in this financial distribution, with the Nigeria Customs Service, Federal Inland Revenue Service, and Nigerian Upstream Petroleum Regulatory Commission receiving N16.38 billion, N24.59 billion, and N12.52 billion, respectively, as cost of revenue collections.
This robust disbursement underscores the resilience and diversity of Nigeria’s revenue streams, with the FAAC ensuring equitable distribution to various tiers of government and relevant agencies.
As the nation navigates its fiscal landscape, such financial dynamics contribute to sustaining essential services and fostering economic stability.
