CEM REPORT, FINANCE| The Federation Accounts Allocation Committee (FAAC) announced the distribution of ₦1.143 trillion as total revenue for May 2024.
This figure represents a 5.38% decrease compared to the ₦1.208 trillion shared for April 2024 revenue, according to a statement released by the Office of the Accountant General.
While the distributable revenue for May saw a decline, the total revenue generated in May 2024 was ₦3.25 trillion, reflecting a slight increase of 6.07% from the ₦2.192 trillion recorded in April.
This growth can be attributed to a rise in the Excess Crude Account (ECA) balance, which remained stable at $473,754.57, providing a buffer for unforeseen economic circumstances.
Breakdown of May 2024 Disbursed Revenue
The ₦1.143 trillion distributable revenue was divided amongst the three tiers of government – Federal, State, and Local Government Councils. Here’s a detailed breakdown:
Federal Government: Received ₦365.813 billion, representing approximately 32% of the total distributable revenue.
State Governments: Received ₦388.419 billion, accounting for roughly 34% of the shared revenue.
Local Government Councils: Received ₦282.476 billion, constituting approximately 25% of the distributed funds.
FAAC Distribution of Specific Revenue Components
The FAAC communiqué further detailed the allocation of specific revenue components:
Statutory Revenue: ₦157.183 billion was distributed, with the Federal Government receiving ₦61.010 billion, State Governments ₦30.945 billion, and Local Government Councils ₦23.857 billion. An additional ₦41.371 billion in derivation revenue was shared among mineral-producing states.
Value Added Tax (VAT): ₦463.425 billion was allocated, with N69.514 billion going to the Federal Government, ₦231.713 billion to State Governments, and ₦162.199 billion to Local Government Councils.
Electronic Money Transfer Levy (EMTL): ₦15.146 billion was distributed, with the Federal Government receiving ₦2.272 billion, State Governments ₦7.573 billion, and Local Government Councils ₦5.301 billion.
Exchange Difference Revenue: ₦507.456 billion was allocated, with ₦233.017 billion going to the Federal Government, ₦118.189 billion to State Governments, and ₦91.119 billion to Local Government Councils. A further ₦65.131 billion was allocated as derivation revenue.
Mixed Signals in Revenue Components
The FAAC communiqué also highlighted some key trends within specific revenue components:
Increases: There were significant increases in Companies Income Tax Oil (CIT) and Petroleum Profit Tax (PPT) for May 2024, suggesting positive developments in the oil sector.
Decreases: However, the report also noted considerable decreases in Import and Excise Duties, Royalty Crude and Gas, EMTL, CET Levies, and VAT. These declines require further investigation to understand the underlying factors.
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Looking Ahead
The FAAC disbursement for May 2024 reflects a mixed picture for the Nigerian economy. While there was a slight decline in shared revenue compared to the previous month, the overall revenue generation showed a positive trend.
The significant rise in CIT and PPT indicates potential growth in the oil sector, which needs to be balanced with the observed decreases in other revenue streams. Continuous monitoring and strategic economic decisions will be crucial for ensuring sustainable revenue generation.
