Nigeria’s Excess Crude Account Remains Static, FAAC Revenue Rises 9.8%

By Aduragbemi Omiyale

The balance in Nigeria’s excess crude account (ECA), as of January 17, 2023, stood at $473,754.57, the same amount in the purse as of December 15, 2022, according to an analysis by Business Post.

This was confirmed in a statement issued by the director of information and press at the Ministry of Finance, Mr Phil Abiamuwe-Mowete.

The ECA is an account created to save the extra funds made anytime the country sells crude oil higher than the approved benchmark in the budget. For example, if the crude oil benchmark is $70 per barrel and the commodity sells for $75 per barrel, the excess $5 is saved for rainy days.

In the 2022 budget, the benchmark was $70 per barrel, and in the 2023 appropriation bill, it was raised by the National Assembly to $75 per barrel. Yesterday, the price of Brent crude, which Nigeria’s crude is graded, was sold at $82.84 per barrel in the international market, indicating that Nigeria made an extra $7.84 per barrel.

In the statement, it was disclosed that the distributed revenue generated by the country in December 2022 increased by 9.8 per cent to N990.2 billion from the N902.1 billion recorded in November 2022.

The increase was buoyed by an improvement in revenues from Petroleum Profit Tax (PPT), Companies’ Income Tax (CIT) and VAT, offsetting the decline in import duty.

The N990.2 billion shared last month comprised statutory revenue of N707.756 billion, VAT of N233.277 billion, Exchange Gain of N24.841 billion, and N24.315 billion Electronic Money Transfer Levies (EMTL).

This was disclosed at the meeting of the Federation Account Allocation Committee (FAAC) in Abuja, attended by the Commissioners of Finance of the states of the federation.

The money, which was shared by the three tiers of government, was inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Exchange Gain and Electronic Money Transfer Levies (EMTL).

From the amount, the federal government received N375.306 billion, the states received N299.557 billion, the local government councils got N221.807 billion, and the oil-producing states received N93.519 billion as 13 per cent derivation of mineral revenue.

According to a communiqué issued after the gathering, the gross revenue available from VAT was N250.512 billion, which was an increase distributed in the preceding month, with N7.215 billion allocated to the NEDC project, N10.020 billion given the Federal Inland Revenue Service (FIRS) as cost of collection, and the balance of N233.277 billion given to the Nigeria Customs Service (NCS).

From the VAT earnings, the central government received N34.992 billion, the states received N116.639 billion, and the councils got N81.647 billion.

In the month, the country earned N1.1 trillion as Gross Statutory Revenue, with N31.531 billion removed as cost of collection and N396.896 billion to transfers, savings and refunds, and the balance of  N707.756 billion distributed among the tiers of the government.

The federal government took N325.105 billion, states went with N165.897 billion, LGCs got N127.129 billion, and oil-producing states received N90.625 billion.

Also, the sum of N24.315 billion from EMTL was distributed last month, with the national government taking N3.648 billion, states receiving N12.157 billion, and the local councils getting N8.510 billion.

The communiqué further disclosed that N24.841 billion from Exchange Gain was shared, with the federal government receiving N11.562 billion. The states got N5.864 billion, local government councils received N4.521 billion, and oil-producing states had N2.894 billion.