The three tiers of government comprising federal, states and local government councils shared a grand total of N4.97 trillion as federation revenue approved by the Federal Accounts Allocation Committee (FAAC) in 2016 fiscal year. The N4.97 trillion represents 12 months of disbursements with effect from December 2015 to November 2016 as against last year’s grand total disbursements of N5.5 trillion for similar period. The 2016 allocati0on dipped by N523.2 billion. The December 2016 allocation will be shared in January 2017.
The grand total disbursed in 2016 comprised allocation to Federal Government, states, local government councils and payout to oil producing states, representing 13 per cent share of derivation principle. The sum shared were aggregation of statutory, Value Added Tax (VAT), refund by the Nigerian National Petroleum Corporation (NNPC) to government, among others.
The allocation breakdown revealed that the Federal Government cornered the largest share of the disbursement to the tune of N1,544.384 trillion followed by states with N862.779 billion, local government councils (774) collectively received N489.511 billion while oil producing states collected in the last one year the sum of N213.3 billion as derivation fund. One of the major challenges confronting the current administration remains the steep decline in revenue flows, a situation that has left the government with minimal score in its economic policy.
Crude oil, the nation’s major revenue source, is facing double edged attacks from prices crash on one hand and low production output occasioned by attacks on oil installations by aggrieved militant groups in Niger Delta. Analysis of FAAC disbursement chart indicated that the total fund disbursed to the three tier beneficiaries in October and November 2016 remained unchanged at N420 billion for both months. In January 2016, for instance, the grand total for the month was N387.771 billion. Of the amount, Federal Government’s statutory share was N147.57 billion, states got N74.848 billion, LGs N57.705 billion while oil-producing states collected N27.703 billion. In February, the shared amount was N370.388 billion.
Federal Government got N137.473 billion, states N69.728 billion, LGs N53.757 billion while allocation to oil producing states was N22.380bn. March allocation stood at N345.095 billion with Federal Government receiving N127.2 billion, states N64.518 billion, LGs N49.740 billion, while 13 per cent derivation for the month was N22.780bn. For April, the total allocation was N299.747 billion. The central government got N109.113 billion, states N55.334 billion, LGs N42.668 billion and the sum of N19.750 billion was paid as 13 per cent derivation.
In May, N281.500 billion shared with Federal Government getting the highest amount of N101.215 billion, states N51.338 billion, LGs N39.579 billion and N15.745bn as 13 per cent. The June allocation was N305.128 billion; Federal Government N112. 830 billion, states N57.229 billion, LGs N44.121 billion and N16.738 billion for oil producing states. In the month of July, total allocation was N559.032 billion. Federal Govern-ment got N119.754 billion; states got N101.318 billion, LGs N78.112 billion while N17.124 billion was paid to oil producing states.
For August, N691 billion was shared, out of which Federal Government got N225 billion, states, N153 billion, LGs N116 billion and N9.92 billion as derivation. In the month of September, N510.27 billion was allocated for sharing, out of which Federal Government got N149.310 billion, states N75.732 billion, LGs N58.386bn and N20.293 billion as 13 per cent derivation. The October allocation was N420 billion. Federal Government got N120.351 billion, states N61.044 billion, LGs N47.062 billion while N13.729 billion went to oil producing states. In November, N420 billion was approved by FAAC. Federal Government got N96.674 billion, states N49.035 billion, LGs N37.804 billion, while oil-producing states got N13.548 billion. The last allocation in 2016 was N386.879 billion.
FG’s share was N97.897 billion, states N49.655 billion, LGs N38.282 billion and N13.613 billion as 13 per cent for oil producing states. At the last FAAC session held in Abuja on December 15, the amount available for sharing dipped by N33.1 billion, leaving the sum of N386.9 billion. The Minister of Finance, Mrs. Kemi Adeosun, represented by the Accountant-General of the Federation, Mr Idris Ahmed, attributed the low distribution to decrease in crude oil export by 0.34 million barrels per day, notwithstanding an increase in the average price of crude oil from $46.54 to $47.08 per barrel in November.
“A brief Force Majeure was declared at Bonny Terminal while the Force Majeure at Forcados, Qua Iboe and Brass Terminals were still in place. Federation revenue was low as a result of shut-in and shutdown of pipelines for repairs and maintenance due to leakages and sabotage. However, Company Income Tax and VAT recorded marginal increases,” she said.
However, hope for improved revenue yields in 2017 has been predicted on Federal Government’s ability to push through dialogue with aggrieved militant operating within the creeks of Niger Delta, sustenance of diversification of revenue from oil especially taxes and customs receipt as captured in the 2017 budget of N7.28 trillion. The budget is based on a benchmark crude oil price of $42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the dollar. The assumptions include aggregate revenue of N4.94 trillion to fund the federal budget, which is 28 per cent higher than 2016 full year projection. Oil is projected to contribute N1.985 trillion of the amount.