Yemisi Izuora
The Federation Accounts Allocation Committee (FAAC) has allocated a total of N780.926 billion as Federation Account revenue for March 2020 to the Federal, States and Local Governments and relevant agencies in the country.
The N780.926 billion comprised Statutory Revenue, Value Added Tax (VAT), and Exchange Gain.
This was contained in a Statement of Accounts issued by the Office of the Accountant General of the Federation in Abuja.
The gross statutory revenue for the month of March 2020 was N597.676 billion. According to the statement, this was higher than the N466.058 billion received in February January 2020 by N131.618 billion.
The sum of N120.268 billion was realised from the Value Added Tax (VAT) in the month under review as against N99.552 billion realised in February 2020, resulting in an increase of N20.716 billion. A total of N62.928 billion was available from Exchange Gain in the month under review.
A breakdown of the distribution indicates that from the total revenue of N780.926 billion, the Federal Government received N264.330 billion, the State Governments received N181.487 billion, and the Local Government Councils received N135.950 billion. The Oil Producing States received N38.751 billion as 13% derivation revenue, while the cost of revenue collection by Revenue Agencies and allocation to NEDC was N160.408 billion.
Further breakdown of the distribution shows that, the Federal Government received N217.773 billion from the gross statutory revenue of N597.676 billion. The State Governments received N110.457 billion and the Local Government Councils received N85.158 billion. The sum of N32.299 billion was given to the oil producing States as 13% derivation revenue and N151.989 billion was cost of revenue collection by Revenue Agencies and allocation to NEDC. From the Value Added Tax of N120.268 billion available for the month, the Federal Government received N16.777 billion. The State Governments received N55.925 billion, the Local Government Councils received N39.147 billion, while the cost of collection by Revenue Agencies and allocation to NEDC was N8.419 billion.
Similarly, the Statement confirmed that the Federal Government received N29.780 billion, the State Governments received N15.105 billion, the Local Government Councils received N11.645 billion and the Oil Producing States received N6.452 billion from the total revenue of N62.982 billion available from Exchange Gain. For the month of March, the month of March 2020, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Import and Excise Duties, Oil and Gas Royalties and Value Added Tax (VAT) all recorded substantial increases. Meanwhile, the monthly Federation Account Allocation Committee (FAAC) meeting for the month of April 2020, where the sharing of the March 2020 revenues was discussed, was held through virtual conferencing. Members of the Federation Account Allocation Committee (FAAC) could not meet in Abuja due to the lockdown in the country occasioned by the COVID-19 pandemic.
The revenue sharing is coming on the heels of declining oil export. A plunge in Brent crude oil futures this week has dragged down the dated Brent benchmark on which most physical oil trades and left sellers of West African crude especially hard hit. Dated Brent crude, assessed by S&P Global Platts, plumbed over two-decade lows along with front-month futures contracts and stood just below $14 a barrel on Wednesday.
That meant prices of physical crude grades around the world plumbed new lows, and West African grades – which have suffered relatively large gluts and lack of buyer interest due to long voyage times – are being offered even more cheaply. Still, traders said, sales continued to be slow as storage in many key markets was approaching maximum capacity and refinery activity slowed amid economic lockdowns. Sellers of Nigerian Bonny Light and Qua Iboe crude were offering the lighter grades for a discount of almost $5 compared to dated Brent, traders said.
Nigeria’s NNPC was still finalising official selling prices ahead of June loading programmes, after last month’s figures stood at record lows. “We have to cut down, … with or without OPEC output cut deal,” Mele Kyari, GMD of NNPC said adding that limited storage would force output curbs.