FAAC Allocates N400bn to FG, States, LGs

bondsMinister of Finance, Kemi Adeosun
  • FAAC Allocates N400bn to FG, States, LGs

The Federation Account Allocation Committee on Friday allocated the sum of N400bn to the three tiers of government as statutory distribution for the month of December 2016.

The amount, when compared to the N386.87bn shared in the month of November, represents an increase of N13.12bn.

Addressing journalists shortly after the FAAC meeting, which was held at the headquarters of the Federal Ministry of Finance in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, said the N400bn was distributed under four sub-heads.

They are statutory allocations, where the sum of N224.88bn was allocated; Value Added Tax, N79.27bn; exchange gain, N52.84bn; and excess Petroleum Profit Tax, N42.99bn.

From the statutory allocations, the minister said after deducting the cost of collection to the revenue generating agencies, the Federal Government got N105.76bn; the states, N53.64bn; and local government councils, N41.35bn.

In addition, she said the sum of N15.5bn was given to the oil producing states based on the 13 per cent derivation principle.

For VAT allocation, the minister said the Federal Government received N11.4bn; the states, N38bn; while the local government councils got N26.63bn.

Adeosun said during the month, the sum of N248.71bn was generated as gross statutory revenue, adding that this was higher than the N240.1bn received in November by N8.59bn.

The minister stated that the balance in the Excess Crude Account currently stood at $2.45bn.

A communique issued at the end of the meeting stated that the force majeure declared at the Forcados, Qua Iboe and Brass crude oil export terminals affected revenue negatively.

For instance, it stated that there was a revenue decline of $65.4m in federation export sales due to a drop in crude oil export volume by 1.39 million barrels.

The Chairman, FAAC Commissioners’ Forum, Mahmoud Yunusa, said the states would work with the Federal Government to address the current recession in the country.

Yunusa, who is also the Commissioner for Finance in Adamawa State, said that the target of the states now was to generate enough revenue internally to pay salaries.

He gave an assurance that once this was done, whatever allocation received from the Federation Account would be used by the states for capital projects.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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