FAAC allocation rises 2.47% in January as federal govt,subnationals receive N1.149trn

Business a.m

The Federation Account Allocation Committee (FAAC) released a total of N1,149.816 trillion  among the 774 local governments, 36 state governments, and the federal government for January 2024,representing a 2.47 per cent increase from the N1,127.408 trillion distributed in December 2023. 

The February 2024 meeting of the Federation Accounts Allocation Committee (FAAC) was held under the chairmanship of Wale Edun, the Minister of Finance and Coordinating Minister for the Economy. During the meeting, the committee reviewed and approved the distribution of revenue generated in January 2024. 

The revenue was shared at the February 2024 FAAC meeting, chaired by Wale Edun,the minister of finance and coordinating minister for the economy. 

According to a communiqué signed by Bawa Mokwa, the director of press and public relations under the office of the accountant general of the federation,the N1.149  trillion total distributable revenue comprised distributable statutory revenue of N463.079 billion, distributable Value Added Tax (VAT) revenue of N391.787 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.922 billion and Exchange Difference revenue of N279.028 billion.   

The communiqué stated that total revenue in January 2024 was N2.068 trillion. Out of this amount, N78.412 billion was deducted for cost of collection, while N639.926 billion was transferred, used for interventions, and refunded. Additionally, N200 billion was set aside as savings.

The communiqué further explained that the gross statutory revenue of N1.151 trillion received in January 2024 was higher than the N875.382 billion received in December 2023 by N276.426 billion.

According to the communiqué, the gross revenue from the Value Added Tax (VAT) in January 2024 was N420.733 billion, a decrease of N71.773 billion from the N492.506 billion available in December 2023.  

From the total distributable revenue of N1.148 trillion, the federal government received N407.267 billion, the state governments received N379.407 billion, and the local government councils received N278.041 billion. This represented 35.74 per cent, 33.17 per cent, and 24.09 per cent of the total distributable revenue respectively. 

Additionally, the communiqué noted that N85.101 billion (representing 13% of mineral revenue) was shared among the mineral-producing states. This amount was distributed based on the derivation principle as enshrined in section 162 (2) of the 1999 Constitution. Under this principle, mineral-producing states receive 13% of the mineral revenue generated within their respective territories. 

From the N463.079 billion distributable statutory revenue, the federal government received N216.757 billion, the state governments received N109.942 billion, and the local government councils received N84.761 billion.Meanwhile, the 13 per cent mineral revenue sharing to the oil-producing states totaled N51.619 billion.

From the N391.787 billion distributable VAT revenue, the federal government received N58.768 billion, the state governments received N195.894 billion, and the local government councils received N137.125 billion.

The N15.922 billion Electronic Money Transfer Levy  was shared as follows: The federal government received N2.388 billion, the state governments received N7.961 billion, and the local government councils received N5.573 billion. 

The federal government received N129.354 billion from the N279.028 billion Exchange Difference revenue, while the state governments received N65.610 billion and the local government councils received N50.582 billion. The sum of N33.482 billion (representing 13% of mineral revenue) was shared to the oil-producing states as derivation revenue. 

Overall, the various revenue sources for the month of January 2024 was a mixed bag of increases and decreases.

There were significant increases in Companies Income Tax (CIT), Import Duty, Petroleum Profit Tax (PPT), and Oil and Gas Royalties. On the other hand, Value Added Tax (VAT), Export Duty, Electronic Money Transfer Levy (EMTL), and CET Levies saw significant decreases. 

Meanwhile, the  balance in the Excess Crude Account (ECA) remained $473,754.57.