New Telegraph

FG, states, LGs share N2.5trn in 4 months

The Federal Government, states and 774 local governments in the country have shared a total of N2. 55 trillion as revenue from the Federation Account Allocation Committee (FAAC) from January till April, 2022. Analysis of the figures by New Telegraph revealed that in January, N574 .668 billion was shared as total revenue to the three tiers of governments as N590.546 billion was shared in February, N725.571 billion in March and N656.602 billion in April. The May revenue allocation will be shared this month.

FAAC is a body of representatives of states’ commissioners of finance, states’ auditorgeneral, representatives of key revenue generating agencies of government – Nigerian National Petroleum Company Limited (NNPCL), Nigeria Customs Service (NSC) and Federal Inland Revenue Service (FIRS).

Also in the committee is a representative of Revenue Mobilisation Allocation and Fiscal Commission (RMAF. The body is chaired by the minister of finance budget and national planning. In the absence of the minister, the accountant general of the federation (AGF) acts instead. Save for the month of March when amount in threshold of over N700 billion was shared, revenue shared in the previous months were in the region of N500 billion. Findings by New Telegraph revealed that taxes collected by Federal Inland Revenue Service (FIRS) and excise duty by the Nigeria Customs Service (NCS) currently account for the bulk of revenue flow into the federation purse.

Also, the Nigerian National Petroleum Company Limited (NNPCL), whose revenue hitherto accounted for 80 per cent of revenue inflow to the federation purse, has been defaulting in revenue remittance on account of funding fuel subsidy. Analysts explained that with NNPCL saddled with sole importation of crude oil, and given the current surge in price of crude oil at international market, Nigeria may incur N3.55 trillion in petrol under-recovery cost, better known as subsidy, in 2022, as NNPCL described its subsidy spending as an under-recovery of PMS/value shortfall.

It was gathered that the persistent low revenue sharing to three tiers of governments month after month was responsible for the backlog of unserviceable contractual obligations at states and local government levels. Majority of states and local governments are unable to pay employees the monthly salary, pension to the pensioners and other contractual obligations. The matter is worse for states that have debt obligations to service. In March this year, the Nigerian Governors Forum queried NNPCL’s profitability status against the backdrop of non-remittance of oil sales revenue into federation account. The Chairman of Governors’ Forum and Governor of Ekiti State, Dr. Kayode Fayemi, recalled that despite the rising crude oil price at the international market, the states were getting nothing from Nigeria’s oil export.

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