FAAC disburses N650.8 billion in December 2019, South-South states receive highest share

The latest report from the Federation Account Allocation Committee (FAAC) released by the National Bureau of Statistics (NBS) stated that the sum of  N650.83 billion was shared among the three tiers of government in December 2019.

The report shows that Nigeria’s revenue allocation decreased by 7.29% in December 2019 compared to N702.02 billion disbursed in November and decreased by 6.16% compared to 693.53 billion disbursed in October 2019.

The amount disbursed comprised of N491.88 billion from Statutory Account; N53 billion from FOREX Equalization Account; N15 billion from Good and Valuable Consideration Account; N784.83 Exchange Gain Allocation and N90.17 billion from Valued Added Tax (VAT).

Details

The breakdown showed that the Federal Government received the giant share of N274.76 billion; States received a total of N176.1 billion; Local Governments received N132.66 billion while N51.07 billion was shared among oil-producing states as 13% derivation fund.

  • N208.68 billion was disbursed to the Federal Government Consolidated (CRF) account.
  • Also, N8.35 billion was allocated for the development of Natural resources.
  • Share of Derivation and Ecology was stated at N4.97 billion.
  • Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.42 billion, N6.86 billion and N3.9 billion respectively as cost of revenue collections.
  • N5.8 billion was allocated to FCT, Abuja.

South-South States received N57.81 billion

Out of the six geo-political zones in the country, South-South states scooped the largest share followed by North West, which received a total of N26.06 billion and North East (22.95 billion).

South West received N20.02 billion, South East received N16.43 billion while North received the least allocation of N15.65 billion.

FAAC disburses N650.8 billion as South-South states receive highest share

States with highest allocation 

Delta State received the highest allocation in December 2019, as it scooped N15.89 billion, indicating 9.02% of the total states’ allocation followed by Akwa Ibom’s N12.58 billion (7.14%) and Rivers State which received N11.13 billion gross allocation.

Bayelsa, Kano, Edo and Lagos States received N10.87 billion (6.18%), N4.88 billion (2.77%), N4.25 billion (2.42%) and N4.13 billion (2.34% respectively.

Meanwhile, Kwara State received the least gross allocation in the month of December 2019, as it received N2.74 billion (1.56%) and Ekiti State took away N2.75 billion (1.56%).

Drop in revenue

It is important to stress that government revenue has dropped in recent times due to the development in the global oil market as the oil price war between Russia and Saudi Arabia intensifies, forcing the price of the commodity down in the global market. As at the time of writing this article, oil was sold for $36.23 per barrel which is below the $57 per barrel 2020 budget benchmark.

The Federal Inland Revenue Service (FIRS) did not meet up to its set revenue target of N8.8 trillion. According to data from FIRS, the agency generated N5.26 trillion in 2019, which is just 59.8% of the target.

Upshot

Seeing as many states are struggling to meet their financial obligations, a reduction in revenue allocation from the Federal Government could further compound their financial difficulties. Meanwhile, this should serve as a challenge to state governors to seriously consider and put in place strategy to increase their internally generated fund to aid self-sustainability.

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