Nigerian govts shared N2.19 trillion of federal allocation in May 2024 – NBS

Key Points

• Total Disbursement: N2.19 trillion distributed by FAAC in May 2024 (revenue from April 2024).
• Revenue Sources:
  • Statutory Account (largest): N1.23 trillion
  • Exchange Gain: N438.88 billion
  • Electronic Money Transfer Levy (EMTL): N18.77 billion
  • Value Added Tax (VAT): N500.92 billion
• Distribution:
  • Federal Government: N390.41 billion
  • State Governments: N493.40 billion
  • Local Governments: N293.82 billion
  • Oil-producing states (additional): N120.45 billion from derivation fund
• Federal Spending Breakdown:
  • Consolidated Revenue Account: N255.24 billion (general spending)
  • Derivation and Ecology: N6.03 billion
  • Stabilization Fund: N3.02 billion (savings)
  • Development of Natural Resources: N10.13 billion
  • Federal Capital Territory (FCT): N10.63 billion
• Revenue Generating Agencies (share of collection):
  • Nigeria Customs Service (NCS): N22.53 billion
  • Federal Inland Revenue Service (FIRS): N32.83 billion
  • Nigerian Upstream Petroleum Regulatory Commission (NUPRC): N25.15 billion

 

The Federation Account Allocation Committee (FAAC) disbursed a substantial sum of N2.19 trillion to various tiers of the Nigerian government in May 2024.

This allocation, derived from the total revenue generated in April 2024, underscores the financial dynamics and revenue distribution within the country, according to data obtained by Arbiterz from the National Bureau of Statistics.

This report delves into the specifics of the disbursement, breaking down the sources of revenue, distribution across different government levels, and the implications for Nigeria’s fiscal policy and economic health.

Sources of Revenue

According to the NBS data, the total revenue of N2.19 trillion distributed in May 2024 is composed of several key components:

1. Statutory Account: N1.23 trillion
2. Exchange Gain: N438.88 billion
3. Electronic Money Transfer Levy (EMTL): N18.77 billion
4. Value Added Tax (VAT): N500.92 billion

These figures highlight the diverse sources of government revenue, with the statutory account being the largest contributor.

Distribution Among Government Tiers

The disbursement was allocated among the three tiers of government as follows:

• Federal Government: N390.41 billion
• State Governments: N493.40 billion
• Local Governments: N293.82 billion

Additionally, oil-producing states received N120.45 billion from the 13 per cent derivation fund, reflecting the importance of oil revenue in the fiscal framework.

Breakdown of Federal Government Allocation

The Federal Government’s share was further divided into several key areas:

• Consolidated Revenue Account: N255.24 billion
• Derivation and Ecology: N6.03 billion
• Stabilization Fund: N3.02 billion
• Development of Natural Resources: N10.13 billion
• Federal Capital Territory (FCT) – Abuja: N10.63 billion

Revenue Generating Agencies

The revenue-generating agencies received a total of N80.51 billion for their efforts in revenue collection:

• Nigeria Customs Service (NCS): N22.53 billion
• Federal Inland Revenue Service (FIRS): N32.83 billion
• Nigerian Upstream Petroleum Regulatory Commission (NUPRC): N25.15 billion

Implications for Fiscal Policy

The significant disbursement in May 2024 indicates a robust revenue collection framework and effective distribution mechanism by FAAC. However, it also points to the heavy reliance on oil revenue and statutory accounts, highlighting the need for diversification in revenue sources.

Also Read: FAAC: Federal, state, local governments get ₦2.33 trillion in March, ₦1.87 trillion in April 2024

The allocation to various sectors, such as natural resources development and stabilisation funds, shows a strategic approach to managing national resources and ensuring economic stability.

Challenges and Opportunities

The heavy reliance on oil revenue presents both challenges and opportunities. While oil revenue provides substantial funds for national development, it also makes the economy vulnerable to global oil price fluctuations.

Therefore, there is an urgent need for Nigeria to diversify its revenue sources by bolstering non-oil sectors such as agriculture, technology, and manufacturing.

The FAAC’s disbursement of N2.19 trillion in May 2024 underscores the importance of a well-structured revenue allocation system in Nigeria. By understanding the intricacies of this disbursement, stakeholders can better appreciate the fiscal health of the nation and the need for strategic economic planning.

The focus should now be on leveraging these funds for sustainable development and economic diversification to ensure long-term stability and growth.

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