-Deborah Akinyosoye
The Federation Accounts Allocation Committee (FAAC) has announced the distribution of N1.298 trillion in revenue for September 2024 to the Federal Government, States, and Local Government Councils.
The figure, which marks a notable allocation for the month, was disclosed during the FAAC’s October 2024 meeting in Abuja.
Despite the substantial disbursement, the revenue distribution was shadowed by a decline in gross statutory revenue, highlighting a continuing strain on Nigeria’s fiscal earnings.
The total distributable revenue comprised various sources, including N124.716 billion from statutory revenue, N543.518 billion from Value Added Tax (VAT), N18.445 billion from the Electronic Money Transfer Levy (EMTL), N462.191 billion from Exchange Difference, and an additional N150 billion augmentation.
The FAAC communiqué, issued after the meeting, provided insights into the total revenue generated for the month, which amounted to N2.258 trillion.
However, the gross statutory revenue—N1.043 trillion—was N177.426 billion lower than the N1.221 trillion generated in August 2024.
This significant drop signals ongoing challenges in key revenue streams like Petroleum Profit Tax (PPT) and Companies Income Tax (CIT), both of which saw considerable declines.
On a positive note, revenues from Oil and Gas Royalty, Excise Duty, and the Electronic Money Transfer Levy (EMTL) recorded considerable increases, while VAT and Import Duty experienced marginal growth.
The Federal Government received N424.867 billion from the total distributable revenue, while the States and Local Government Councils were allocated N453.724 billion and N329.864 billion, respectively.
In addition, N90.415 billion was disbursed to the oil-producing states as derivation revenue, representing 13% of mineral revenue.
For the statutory revenue component of N124.716 billion, the Federal Government took N43.037 billion, States received N21.829 billion, and Local Government Councils were allocated N16.829 billion.
The derivation revenue for oil-producing states from this source stood at N43.021 billion.
A significant contributor to the September revenue was the N543.518 billion from VAT collections, which saw a slight increase from the N573.341 billion in August.
Of this, the Federal Government received N81.528 billion, the States took N271.759 billion, and Local Government Councils were allocated N190.231 billion.
The EMTL revenue of N18.445 billion was shared with the Federal Government receiving N2.767 billion, States N9.222 billion, and Local Government Councils N6.456 billion.
Similarly, the Exchange Difference of N462.191 billion saw the Federal Government receiving N218.515 billion, States N110.834 billion, and Local Government Councils N85.448 billion, while N47.394 billion was allocated to oil-producing states as derivation revenue.
The total deduction for collection costs amounted to N80.993 billion, with an additional N878.946 billion allocated for transfers, interventions, and refunds.
While certain revenue streams showed signs of improvement, the dip in statutory revenue underscores the volatility of the country’s income sources, especially amid fluctuating oil and gas markets.
Economic analysts have raised concerns over the recurrent drops in statutory revenue, which could further strain the government’s ability to fund critical infrastructure and social programs.
The continued reliance on non-oil revenue sources like VAT, Excise Duty, and EMTL will be crucial to stabilizing the country’s finances in the months ahead.
The FAAC’s next meeting is expected to focus on strategies to boost revenue generation, including reforms in tax administration and the exploration of new avenues for non-oil income, as Nigeria grapples with balancing fiscal pressure and developmental goals