FAAC declines by N20bn as FG, States, LGAs share N635bn for Jan

*NEITI: 3 tiers of govt shared N6.41trn in 2017
The Federation Account Allocation Committee ( FAAC) has distributed N635.554billion to the Federal Government, 36 States and Local Government Areas as allocation for January 2018.

The development showed a decline of about N20billion as the three tiers of government shared N655billion in December 2017.

The FAAC meeting, which was presided over by the Accountant General of the Federation, Ahmed Idris, said that the gross revenue of N538.908billion received for the month was lower than the N540.446 billion received in the previous month by N1.538 billion.

According to him, operational challenges caused a decrease in crude oil export by 0.36 million barrels which reduced revenue from export sales for the federation by $113.86 million.

But the Accountant General said that the average price of crude oil increased from $56.83 to $57.71 per barrels during the period.
Giving the breakdown, the Federal Government received a total of N263.283 billion including VAT.

Idris also disclosed that the 36 state governments received a total of N143.902billion VAT inclusive while the Local Government Areas got a total of N129.985billion VAT inclusive.

According to Idris, other major issues that impacted negatively on operations were the Shut-ins and Shut-downs of production at various terminals for repairs and the Force Majeure declared at Bonny Terminal that was still in place during the period under review.

He also said that there were significant increases in Oil Royalty and Value Added Tax (TAT) while revenue from Import Duty increased marginally.

Petroleum Profit Tax (PPT) and Companies Income Tax (CIT) recorded decreases.

The distributed Statutory Revenue for the month is N538.908 billion, bringing the total revenue distributed for the month including VAT to N635.554 billion.

He also disclosed that the total balance of money in the Excess Crude Account (ECA) stood at $2.317billion while the Excess Petroleum Profit Tax (PPT) stood at $133 million.

The oil producing states received a total of N52.042 billion as 13 per cent derivation of mineral revenue from a total of N400.325 billion generated from crude oil sale for the month.

Meanwhile, the Chairman of Finance Commissioners’ Forum, Mahmoud Sale Yunusa said that the state’s are satisfied with the amount of money distributed to the three tiers for the January allocation.

Yunusa said that by March 2018, they expect increased revenue adding that, “By March, we expect increased revenue and there will be a great chunk of oil revenue.”

In a related development, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that FAAC disbursed N6.418trillion in 2017.

The development showed an increase of 25.8% and 6.8% when compared to total disbursements of N5.1trn and N6.011 trn in 2016 and 2015, respectively.

A breakdown of the amount disbursed in 2017 showed that the Federal Government received N2.564trn; the 36 states got N1.859 trn, while the 774 local government areas shared N1.502 trn.

The information is contained in the latest edition of the Quarterly Review of NEITI, entitled: “Analysis of FAAC Disbursements in 2017 and Projections for 2018”.

But the review noted that despite the fact that FAAC disbursements increased in 2017 over the preceding years, they were still 34.1% and 25.3% lower than total disbursements of N9.742 trn and N8.595 trn in 2013 and 2014, respectively.

The NEITI review attributed the revenue increase in 2017 to rising oil prices, improved oil production, and greater attention towards development of non-oil revenue sectors.

It projected brighter prospects in 2018 as a result of the current oil price, which recently hovered around $70 per barrel, in addition to upsurge in oil production.

State – by – state breakdown of the FAAC allocations in 2017 showed that Akwa Ibom State received the highest share of 143.6bn , followed by Rivers State with a total allocation of N119.6bn.

Delta State came third with a total allocation of N111.2 bn in 2017, while Bayelsa State got N105.3 bn to take the fourth position.
On the other hand, Osun State received N10.4 bn to take the lowest position of FAAC within the year under review.

The breakdown of FAAC Receipts in 2017 by states is as follows: Abia – N38.88bn; Adamawa- N37.44bn; Akwa Ibom -N143.61bn; Anambra -N41.34bn; Bauchi -N39.52bn; Bayelsa -N105.26bn; Benue -N39.80bn; Borno – N46.54bn; Cross River -N23.45bn; Delta -N111.20bn; Ebonyi -N35.49bn; Edo -N36.84bn; Ekiti -N25.63bn; Enugu -N37.83bn; Gombe -N31.23bn;

Imo -N 38.12bn; Jigawa – N45.26bn; Kaduna -N50.81bn; Kano -N65.14bn; Katsina – N46.34bn; Kebbi -N40.08bn; Kogi -N39.65bn; Kwara -N33.11bn; Lagos -N89.69; Nassarawa -N35.20; Niger -N42.47bn; Ogun -N26.19bn; Ondo 45.90bn; Osun -N10.44bn; Oyo -N44.47bn; Plateau -N29.62bn; Rivers -N119.63bn; Sokoto -N41.24bn; Taraba -N33.92bn; Yobe -N39.49bn; and Zamfara -N28.45bn.

Another striking feature of the latest NEITI review of FAAC allocations is the disclosure that the third quarter of 2017 recorded highest revenues of N1.929 trn, while second quarter recorded the lowest revenues of N1.377 trn.

The NEITI review also revealed that revenue disbursements from Value Added Tax (VAT) have been on the increase since 2015.

The increase is an indication of a positive signal in recognition of the government’s policy towards the development of non-oil sector through sustained revenue generation from services.

“VAT disbursements in 2017 were N967.7 bn and N811bn in 2016. This represented an increase of 19.3% in 2017 over the figures for 2016. Also, total VAT disbursements in 2015 were N778.7bn. This represented an increase of N188.9 bn (24.3%) over the 2015 figures,” the publication remarked.

From the review, the 36 states received the highest share of VAT revenues of N464.5bn in 2017, followed by N325.1 bn shared among the 774 local government councils, while the Federal Government received the lowest share from VAT proceeds with N139.3bn.

This is on the account of the fact that states take 50% of VAT, while LGAs and the Federal Government take 35% and 15%, respectively.

The NEITI review explained the connection between FAAC disbursements and Nigeria’s exit from recession in 2017.

The report also attributed this development to increased revenues from oil and gas sector as a result of rising oil prices and improved crude oil production due to stability in the Niger Delta.

On Paris Club loan refunds, the review disclosed that the 36 states received N760.18bn. The refunds were released in two batches of N516.38bn and N243.79bn, respectively.

A breakdown showed that Rivers State got the highest amount of N44.925bn, while Gombe State received the lowest sum of N13.4bn.

The NEITI quarterly review is designed to provide timely information and data on FAAC disbursements to the three tiers of government.

The publication is a tool to support citizens’ advocacy, promote constructive debate, information and enlightenment in tracking the utilization of the funds for purposes of development.

NEITI’s interest in FAAC disbursements and the statutory recipients is in view of the fact that over 80% of the funds are derived from the extractive industry.