FAAC Allocation to FG, States, LGAs Drops 9.6%

By Adedapo Adesanya

Total allocation to the three tiers of government from the Federal Account Allocation Committee (FAAC) fell by 9.6 percent in February 2020 as the sum of N647.35 billion was disbursed during the period.

According to a Business Post analysis, in January 2020, the sum of N716.30 billion was allocated to the Federal, States, and Local Governments, but in February, the amount declined by N68.95 billion, according to data released by the National Bureau of Statistics (NBS).

The report showed the amount disbursed comprised N524.59 billion from the Statutory Account, N16.30 billion from Non-Oil Revenue, N659.08 million from Excess Bank Charges Recovered for the Month, N104.76 billion from Valued Added Tax (VAT) and N1.04 billion exchange gain differences.

According to the report, the Federal government received the largest share of the allocation, amounting to N267.39 billion, followed by the 36 states which collectively received the sum of N176.92 billion, while all 774 local government received the sum of N132.94 billion.

The remaining sum of N46.20 billion was shared among the nine oil producing states of Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos as 13 percent derivation fund.

Other breakdown by the statistical authority showed that revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N6.17 billion, N6.94 billion and N4 billion respectively as cost of revenue collections.

Further breakdown of revenue allocation distribution to the Federal Government showed that the sum of N201.92 billion was disbursed to the FGN consolidated revenue account; N4.80 billion was shared as share of derivation and ecology; N2.40 billion went into stabilization fund; N8.06 billion was allocated for the development of natural resources; and N6.58 billion to the Federal Capital Territory (FCT), Abuja.

A breakdown of states allocation showed that Delta State was the largest state by allocation in the second month of the year with N18.3 billion, followed by another oil producing state, Rivers, which received a sum of N14.3 billion, while Akwa-Ibom, another oil producing state, was allocated N12.3 billion.

Lagos State received a total sum of N13.8 billion, even as an oil producing state, while Ekiti State was the lowest receiver of the allocation with N3.96 billion.

According to the NBS, deductions were removed from states allocations to cover external debt and contractual obligations among others which include deductions for the National Water Rehabilitation Projects, National Agricultural Technology Support Programme and Salary Bailout.

While the allocation rose in January 2020 to 716.30 billion from N650.83 billion in December 2019, and fell in February, current realities faced by the country due to the outbreak of the COVID-19 and slump in oil prices globally point to the fact allocation for the month of March will likely drop further.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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