Revenue Drops by N174bn in April as FG, States, LGs Share N606bn

By Ndubuisi Francis

The Federation Accounts Allocation Committee (FAAC) yesterday distributed a total of N606.196 billion as April allocation to the federal, state and local governments, representing a N174.73 billion shortfall when compared to the N780.926 billion distributed in the preceding month of March.

The distribution was conducted via a virtual conference, chaired by the Permanent Secretary, Ministry of Finance, Budget and National Planning, Dr. Mahmoud Isa-Dutse.

A communique issued after the conference indicated that the N606.196 billion comprised Value Added Tax (VAT), Exchange Gain, Solid Mineral Revenue, Excess Bank Charges and Excess Oil Revenue.

The gross revenue available from the VAT for April was N94.495 billion as against N120.268 billion distributed in the preceding month of March resulting in a decrease of N25.772 billion.

The VAT distribution saw the federal government getting N13.182 billion; states received N43.941 billion, while local government councils got N30.758 billion.

A breakdown showed that out of the total distributable revenue of N606.196 billion, the federal government received N169.831 billon, the states got N86.140 billion, local government governments got N66.411 billion, while the oil producing states received N32.895 billion as 13 per cent derivation revenue.

In contrast, oil-producing states received N38.751 billion as 13 per cent derivation revenue in March while the cost of revenue collection by revenue agencies and allocation to the North East Development Agency (NEDC) was N160.408 billion.

But in the month of April, a total of N15.134 billion was for the cost of collection/FIRS; refund/allocation to the North East Development Commission (NEDC); and transfer to excess oil account.

In recent months, FAAC had failed to break down these items to give a clear picture of what is allocated specifically to the NEDC, cost of collection and transfers to excess revenue account.

The communique also revealed that Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Import and Export Duties, oil and VAT, all recorded decreases.

Due to dwindling revenue occasioned by the slump in global oil prices as a result of the recent price war between Russia and Saudi on one hand and the impact of the COVID -19 pandemic on demand for oil on the other, the federal government decided to look towards the Sovereign Wealth Fund (SWF) to augment distributable revenue for FAAC in June.

In this regard, President Muhammadu Buhari approved the withdrawal of $150 million from the Stabilisation Fund component of the Nigeria Sovereign Investment Authority (NSIA), operators of the SWF, to boost the June FAAC distribution among the stakeholders.