Economic Confidential, January 2008

NATIONAL

FG, States, LGs Share N358b from Federation Account

By Abdulsamad Yusuf

The Federation Accounts Allocation Committee (FAAC) at the December meeting shared a total of N357.997 billion from the Federation Account among the three tiers of government and other revenue agencies

The amount, which represents 63.2 per cent of the total revenue of N566.729 billion realised in November, comprises of statutory allocation of N331.328 billion and Value Added Tax (VAT) of N26.669 billion.

The Accountant General of the Federation (AGF), Mr. Ibrahim Dankwambo who was represented at a media briefing after the meeting, said mineral and non-mineral revenue accounted for N538.949 billion of the total revenue while Value Added Tax accounted for the balance of N27.780 billion.

Also transfer to excess crude account for the month under review is according to Ambassador Kabiru Rabiu, a Federal Commissioner, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) about N47.288 billion. He attributed the increased in revenue to improved revenue collection by the department fro Petroleum Resources (DPR), NNPC, Customs and FIRS.

The high crude price in the international market boosted the total revenue collected. The country realised revenue totaling N538.949 billion, as against N430.213 billion in the preceding month. As a result of this, no money was shared from the Domestic Excess Crude among the three tiers of government unlike the previous months due to the increase in revenue. The total funds declared and recommended for distribution for the month is N357.997 billion, as against N310.710 billion for the previous month, thus, showing an increase of N47.287 billion or 15.22 per cent.

The Federal Government received the lion’s share of the statutory allocation of N155.079 billion (about 52.68 per cent), as against the N133.678 billion received in the preceding month.

The FAAC allocated N78.658 billion (about 26.72 per cent) and N60.642 billion (20.60 per cent) to the state and local governments from statutory revenue, compared with the N67.803 billion and N52.273 billion received in the previous month.

The 13 per cent derivation accounted for the balance of the statutory revenue of N36.949 billion, which would be shared by the nine oil producing states of Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo , Imo, Ondo and Rivers.

The states received 50 per cent (N13.334 billion) of the total VAT collection during the month under review, while the Federal Government and the Local Governments got N4 billion (15 per cent) and N9.334 billion (35 per cent), respectively.

The federal, state and local governments had shared VAT of N4.001 billion, N13.335 billion and N9.335 billion in the preceding month.

For their efforts in revenue collection, both the Federal Inland Revenue Service and the Nigeria Customs Service were paid N2.218 billion and N1.545 billion being cost of collection.