FAAC Reflates Economy With N605.958bn As May Allocation Drops N11bn.
Faced with the grim prospect of declining revenue, the Federation Accounts Allocation Committee (FAAC) Wednesday reflated the economy with N605.958 billion, a drop of about N10.928 billion from the amount shared among the three tiers as April allocation.
FAAC in April shared about N617 billion among the three tiers while the about N11 billion drop from in May allocation indicates that. Nigeria is struggling to make ends meet.
This is amidst the counter-accusations of money printing by the Central Bank and denial by the National Economic Council, and the Nigerian National Petroleum Corporation (NNPC) and the recent statement by the World Bank that the Central Bank’s monetary policy was incapable of getting the country out of the present economic quagmire.
The DMO had in 2014 reported that Nigeria’s total debt was $67.7bn with domestic debt accounting for $57.9bn and foreign debt $9.7bn.
By 2020, Nigeria’s total debt increased by 27.5 per cent to $86.3bn, with domestic debt accounting for $53.0bn (a decline by USD 4.9bn or 8.5 per cent from 2014 total domestic debt) and foreign debt accounting for $33.3bn (an increase by USD23.6bn or 243.3 per cent from 2014 total foreign debt).
At this level of total debt, 80-90 per cent of government revenue for Q1 2021 went towards debt service, meaning there was less and less revenue to be shared.
However, the amount shared is inclusive of the cost of collection to NCS, DPR and FIRS.
The Federal Government of the total amount received N242.120 billion, the States received N194.195 billion, the Local Government councils got N143.742 billion while the oil-producing states received N26.901 billion as derivation (13% of Mineral Revenue).
FAAC at the end of the meeting indicated that the Gross Revenue available from the Value Added Tax (VAT) for May 2021 was N181.078 billion as against N176.710 billion distributed in the preceding month of April 2021, resulting in an increase of N4.368 billion.
The distribution is as follows; Federal Government got N25.260 billion, the States received N84.202 billion, and Local Government Councils got N58.941billion.
The distributed Statutory Revenue of N428.198 billion received for the month was lower than the N497.385 billion received for the previous month by N69.197 billion, from which the Federal government received N175.541 billion, States got N89.037 billion, LGCs got N69.644 billion, and Derivation (13% Mineral Revenue) got N24.666 billion.
Companies Income Tax (CIT), and Oil and Gas Royalties, Import and Excise Duty also recorded decreases while only Value Added Tax (VAT) increased, although, marginally.
The communique however disclosed that total revenue distributable for the current month inclusive of Gross Statutory Revenue of N357.888 billion, Value Added Tax (VAT) of N168.403 billion, Solid Mineral Revenue of N7.940 billion, Exchange Gain of N1.727 billion and an augmentation from Non-Oil of N50 billion and N20 billion bringing the total distributable revenue to N605.958 billion.
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