CEM REPORT, ECONOMY | In a significant development for Nigeria’s fiscal landscape, the Federation Accounts Allocation Committee (FAAC) has disclosed the distribution of ₦1.15 trillion in revenue to the three tiers of government for February 2024. This marks a notable increase of ₦20 billion (1.77%) from the ₦1.13 trillion allocated in January 2024.
Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant General of the Federation, highlighted the positive trend in the nation’s revenue streams. In a statement on Wednesday, Mokwa detailed the increase, indicating a promising outlook for Nigeria’s fiscal health.
Breakdown of Revenue
January’s allocation encompassed various revenue sources, including gross statutory revenue, Value Added Tax (VAT), Companies Income Tax (CIT), enhancements from Forex and Non-oil Mineral Revenue, and the electronic money transfer levy (EMTL). The total revenue available in January 2024 amounted to a robust ₦2.068 trillion, with deductions totaling ₦918.338 billion for collection costs, transfers, interventions, refunds, and savings.
According to a communique issued by FAAC, the ₦1,149.816 billion total distributable revenue comprised distributable statutory revenue of N463.079 billion, distributable Value Added Tax (VAT) revenue of ₦391.787 billion, Electronic Money Transfer Levy (EMTL) revenue of ₦15.922 billion, and Exchange Difference revenue of ₦279.028 billion. Total deductions for collection costs, transfers, interventions, and savings amounted to ₦918.338 billion.
FAAC Allocation Breakdown
The statement provided a breakdown of how the revenue was shared among the federal, state, and local governments. The Federal Government received N407.267 billion, the State Governments received N379.407 billion, and the Local Government Councils received N278.041 billion. Additionally, a total sum of N85.101 billion (13% of mineral revenue) was shared with benefiting states as derivation revenue.
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Tax Landscape Insights
The tax landscape in January 2024 witnessed significant rises in Companies Income Tax (CIT), Import Duty, Petroleum Profit Tax (PPT), and Oil and Gas Royalties. However, VAT, Export Duty, EMTL, and CET Levies experienced considerable declines. This mixed performance underscores the evolving nature of Nigeria’s revenue generation capabilities and the influence of global and local economic dynamics on tax collections.
Meanwhile, the balance in the Excess Crude Account (ECA) remained steady at $473,754.57, providing stability in the midst of changing revenue patterns.
As Nigeria navigates its fiscal terrain, the FAAC’s latest allocation offers valuable insights into the nation’s economic resilience and the ongoing efforts to optimize revenue generation and distribution for sustainable development.
