The gross monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N716bn (US$1.98bn) in January (from December revenue). This was an improvement of N80bn on the previous month. A summary of the committee’s statement in the local media last week revealed that receipts from petroleum profit tax, companies’ income tax (CIT), VAT, and oil and gas royalties were well up on the previous month whereas import duty was slightly higher. The balance in the excess crude account was unchanged at US$325m.
The gross payout consisted of the gross statutory allocation of N601bn, the VAT Pool of N115bn and a modest exchange-rate gain. The fees and charges of the collection agencies consumed N43bn of the total declared.
Recent FAAC payouts highlight the point that revenue collection is lagging the budget. CBN monthly data for gross revenue collected in the federation account in the 13 months to November show that the N799bn budget for oil receipts was not once achieved, and that the best performance was N602bn in November 2018. The N447bn target for non-oil revenue was achieved just once, in July with N574bn collected in the month of peak CIT receipts.
The states received N242bn from the latest distribution including the payout to the beneficiaries of the 13% derivation formula. This would not have covered their average aggregate recurrent spending of N269bn per month in 2018, let alone the average (and grossly inadequate) outlay on capital items of N101bn. A minority of states collect sufficient internally generated revenue to top up the FAAC payout and meet their obligations.
Money markets saw an inflow of N351bn on Monday, representing the net distribution to state and local governments. The FGN’s share is remitted directly to the treasury single account.