FAAC disburses N647.35 billion in February as allocation drops further

The Federal Account Allocation Committee (FAAC) disbursed the sum of N647.35 billion to the three tiers of government in February 2020.

Checks by Nairametrics confirmed that this marks a decline compared to N716.3 billion and N650.83 billion  that were disbursed in January 2020 and December 2019, respectively.

The February disbursement was disclosed in the latest monthly allocation report which was published by the National Bureau of Statistics (NBS).

According to the report, the Federal government received the giant share of N267.39 billion, followed by the 36 states which collectively received the sum of N176.92 billion. The local governments, on the other hand, received the sum of N132.94 billion.

The amount disbursed comprised of N524.59 billion from the Statutory Account, N16.30 billion from Non-Oil Revenue, N659.08 million from Excess Bank Charges Recovered for the Month, N104.76 billion from Valued Added Tax (VAT), and N1.04 billion exchange gain differences.

FAAC disburses N647.35 billion in February as allocation drops further

Details 

The breakdown showed that the sum of N201.9 billion was disbursed to the Federal Government Consolidated Revenue Account and N4.8 billion as a share of derivation and ecology. See further breakdown below:

  • Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N6.17 billion, N6.94 billion and N4 billion respectively.
  • The Federal Government received N2.4 billion as stabilization fund, N8.06 billion for the development of natural resources and N6.58 billion to the Federal Capital Territory (FCT).
  • Oil-producing states received an additional sum of N46.2 billion as part of the 13% derivation fund.

States Allocation: Delta State received N18.32 billion which is the highest share of the total gross allocation. Rivers State followed, having received a total of N14.28 billion while Akwa Ibom received N12.25 billion in gross allocation. Other top receiving states in the month of February include Lagos State with a total of N13.79 billion and Bayelsa State which received N13.39 billion.

On the other hand, five states with the least share of gross allocation in the month of February include – Ekiti, Kwara, and Ebonyi States with N3.96 billion, N3.97 billion and N3.99 billion respectively. Others include Nassarawa State which received N4 billion and Osun State with N4.13 billion.

States deductions: For the period under review, a total sum of N36.42 billion was deducted from the states’ allocation for the following reasons:

  • External debt deduction was put at N3.64 billion, while contractual Obligation (ISPO) was estimated at N6.44 billion. Other deductions represented the highest deduction as it cost the states a sum of N26.34 billion.
  • According to the NBS, other deductions covered National Water Rehabilitation Projects, National Agricultural Technology Support Programme and Salary Bailout.

Revenue decline: In recent times, government revenue has dropped due to the drastic slump in global oil prices. The price slump is mainly due to the oil price war between Russia and Saudi Arabia, a situation that has been complicated by the Coronavirus pandemic which has ravaged world economies, basically halting trading activities in most of the affected countries.

It is now feared that the Federal Government allocation to the three tiers of government may decline further in the coming months, as the country’s biggest export commodity continues to dwindle in price.

What this meanstherefore, is that it is high time the Federal Government and all states of the federation begin to look inwards in order to device other means of generating funds internally through the  revamp of other sectors of the economy.

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