FAAC shares N903.48bn to federal govt, subnationals as allocation drops to N196.52bn in September

The Federation Account Allocation Committee (FAAC), has shared a total of N903.480 billion to the  federal government,36 states, and 774 local government councils as federation allocation for September 2023.

The September revenue of N903.48 billion represents a decrease of N196.52 billion compared to the August disbursement of N1.1 trillion.

This is according to the Communique released after the September 2023 FAAC meeting in Abuja, which was chaired by Wale Edun, minister of finance and coordinating minister of the economy.

Meanwhile, the balance in the Excess Crude Account (ECA) as of October 24, 2023, stood at $473,754.57.

The total sum of N903.48 billion was distributed as follows: the federal government received N320.543 billion, the states received N287.071 billion, the local government councils received N210.900 billion, and the oil-producing states received N84.966 billion as Derivation, which is 13 percent of the total mineral revenue. The value-added tax (VAT), electronic money transfer levy (EMTL), and exchange rate difference generated N300.033 billion, N2.500 billion, and N2.376 billion respectively.

In addition, N54.426 billion was allocated to cover the cost of collection, N347.857 billion was transferred and refunded, and N289 billion was transferred to non-oil revenue (savings) for September 2023. It is important to note that this disbursement does not include the 13% derivation on gas revenue, which is currently under review and is yet to be approved by the committee.

According to the communique, the gross VAT revenue available for distribution for September 2023 was N303.550 billion, down from N345.727 billion in the previous month, representing a decrease of N42.177 billion. The decrease was largely attributed to the economic downturn and reduced consumer spending during the month of September.

Out of the total VAT revenue available, N12.142 billion was allocated for costs of collection, and N8.742 billion was allocated for transfers and refunds. The remaining N282.666 billion was distributed to the federal, state, and local governments. The federal government received N42.400 billion, the states received N141.333 billion, and the local government councils received N98.933 billion

The total statutory revenue available for distribution in September 2023 was N1014.953 billion, which was higher than the N891.934 billion received in the previous month of August by N123.019 billion. This increase was mainly due to the increase in oil and non-oil revenues, which was driven by the recovery of the global economy and the rise in crude oil prices.

A total of N41.826 billion was allocated to costs of collection, N339.115 billion was allocated for transfers and refunds, and N211 billion was transferred to Non-Oil Revenue (Savings). The costs of collection include fees and commissions to collecting agents and other expenses incurred in the process of collecting the revenue, while the transfers and refunds are mainly for JV Cash Call, Federation and VAT refunds, and refunds to state and local governments.

After deducting the costs of collection, transfers and refunds, and non-oil revenue savings, the balance of N423.012 billion was distributed to the federal, state, and local governments, as well as to the oil derivation fund. The federal government received N190.849 billion, the states received N96.801 billion, the local governments received N74.629 billion, and the oil derivation fund received N60.733 billion.

In addition, N11.447 billion from the Electronic Money Transfer Levy (EMTL) was distributed to the three tiers of government, with the federal government receiving N1.648 billion, the states receiving N5.495 billion, the local governments receiving N3.846 billion, and N0.458 billion allocated to cover the costs of collection.

Out of N264.813 billion from Exchange Difference, the federal government received N85.647 billion, the state governments received N43.442 billion, and the local governments received N33.491 billion. N24.233 billion was allocated to Derivation (13 percent of mineral revenue), and N78 billion was transferred to the Non-Oil Revenue (Savings) account.

There was a significant increase in Petroleum Profit Tax (PPT) and Oil and Gas Royalties, but Value Added Tax (VAT), Import and Excise Duties, Electronic Money Transfer Levy (EMTL), Companies Income Tax (CIT) and Custom External Tariff (CET) all experienced significant decreases.

In total, the revenue distributable for September 2023 amounted to N903.480 billion, made up of N423.012 billion from statutory revenue, N282.666 billion from VAT, N10.989 billion from Electronic Money Transfer Levy (EMTL), and N186.813 billion from Exchange Difference.