FG, states, LGs got N5.7tn allocation in 11 months


Between January and November this year, the Federation Account Allocation Committee shared a total of N5.74tn to the three tiers of government.

An analysis of the FAAC distribution shows that the amount represents an increase of N765bn over the N4.98tn, which the committee allocated in the corresponding period of 2016.

The committee, headed by the Minister of Finance, Mrs. Kemi Adeosun, is made up of commissioners of finance from the 36 states of the federation; the Accountant General of the Federation and representatives of the Nigerian National Petroleum Corporation.

Others are representatives of the Federal Inland Revenue Service; the Nigeria Custom Service; Revenue Mobilisation, Allocation and Fiscal Commission as well as the Central Bank of Nigeria.

The federation account is currently being managed on a  legal framework that allows funds to be shared under three major components – statutory allocation, Value Added Tax distribution; and allocation made under the derivation principle.

Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments, 20.60 per cent.

The framework also provides that Value Added Tax revenue should be shared thus: the FG, 15 per cent; states, 50 per cent; and the local governments, 35 per cent.

Similarly, extra allocation is given to the nine oil producing states based on the 13 per cent derivation  principle.

A breakdown of the N5.74tn allocation showed that after deducting cost of collections to revenue generating agencies such as the Nigeria Customs Service and the Federal Inland Revenue Service, the Federal Government got the sum of N2.26tn.

A further analysis showed that the 36 states received N1.36tn while the 774 local government areas were allocated a total of N1.03tn.

From the N5.74tn revenue, findings showed that in January, the three tiers of government shared N430.16bn, out of which the Federal Government took N168bn, states, N114.28bn; and local government, N85.4bn.

In February, the federation generated N514bn, out of which the Federal Government’s share was N200.6bn, states, N128.4bn; and local governments, N96.52bn.

However, in March, the revenue generation dipped with N466.9bn; and from that, the Federal Government got N180.5bn; state governments, N116.5bn; and local governments, N87.5bn.

The allocation declined further by N52.07bn from N467.8bn shared in March 2017 to N415.73bn in April, with the Federal Government receiving N163.89bn; states, N117.59bn; while local governments received N87.77bn.

In the month of May, the committee shared the sum of N462.4bn among the three tiers of government as statutory allocation with the Federal Government receiving N147.7bn; states, N74.9bn; and local governments, N57.8bn.

For June, the sum of N652.2bn was shared with the Federal Government receiving N286.6bn; states, N178.6bn; and local governments, N134.9bn.

The month of July witnessed a plunge in revenue as the sum of N467.85bn was shared, with the Federal Government receiving N193bn; states, N130.69bn; and local governments, N98bn.

For August, the committee distributed the sum of N637.7bn, with the Federal Government, states and local governments receiving N260.6bn, N132.18bn and N101.9bn, respectively.

In September, the sum of N558bn was shared with the Federal Government receiving N210bn, states, N140.45bn; and local governments, N107.4bn.

For the month of October, the sum of N532.7bn was shared, while November had a total amount of N609bn allocated to the three tiers of government.

The Chairman, Forum of Finance Commissioners of the Federation Accounts Allocation Committee, Mr. Mahmoud Yunusa, said state governments had resolved to begin an aggressive drive to shore up their internally generated revenue from next year.

The move, according to him, is part of measures aimed at reducing the overdependence of state governments on revenue from the federation account.

He said the states would be setting up machineries to assist in boosting the IGR.

He said, “There are a lot of states that are doing very well in terms of revenue generation and most of the states in the North-East have started doing g very well because there is improvement in commercial activities and taxes are being collected in these areas.

“A lot of states are really making progress but we are far from where we should be and we will get there very soon. If there is one restructuring that is very difficult, it is to restructure the revenue base.

“Our intention is to really reduce significantly the overdependence of states on revenue that comes from the centre.”