Economic Confidential, November, 2009

NATIONAL

Again FG, States Share N354bn in November

A total sum of N354.303 billion was distributed among the federal, state and local governments at the monthly meeting of Federation Account Allocation Committee (FAAC) in November 2009.

The revenues which were generated in October 2009, shows that Statutory Allocation accounted for N165.624 billion of the total distributed revenue, while Value Added Tax and Budget Augmentation amounted to N39.778 billion and N121.228 billion, respectively.

It will be recalled that the three tiers of government had last month shared a total sum of N350.724 billion, made up of statutory allocation of N235.121 billion, Value Added Tax of N36.530 billion and budget augmentation of N51.193 billion.

That November 2009 allocation indicates an increase of N3.581 billion or 1.02 percent compared to the amount distributed in October 2009.

Total distributable statutory revenue for the month is N165.623 billion (based on budgeted exchange rate of N125 per dollar) indicating a decrease of N69.498 billion as against what was shared the preceding month.

The decrease was attributed to decline in oil production as a result of shut down of facilities earlier repaired at Escravos and Forcados terminals following the discovery of more sabotage points as well as force majeure in Amenam, Bonny and Forcados terminals.

In addition, the sum of N121.228 billion was proposed for distribution from the Excess Crude Proceeds Account to augment the shortfall in budgeted revenue for the month of October, 2009. Furthermore, the total sum of N27. 673 billion was recommended for distribution being exchange gain for the month.  This represents the exchange difference between the prevailing rates of N145.086 per dollar and budgeted rate of N125 per dollar for November, 2009. The total revenue distributable for the month (including VAT) is N354.302 billion.

According to a communiqué issued and signed by the Accountant-General of the Federation, Ibrahim Dankwambo, the total net amount for distribution is N165.623  billion out of which the Federal Inland Revenue Service (FIRS) received N2.326 billion while the Nigerian Customs got N1.754 billion being their four percent and seven percent cost of collections respectively.

The Federal Government received the sum of N81.561 billion (52.68 percent), State and Local governments got N41.369 billion (26.72 percent) and N31.894 (20.60 percent) respectively.

The total revenue available from the Value Added Tax (VAT) was N39.778billion as against N36.529 billion distributed in the preceding month recording an increase of N3.249 billion.

The oil producing States got additional N10.799 billion being their 13 percent derivation allocation.

The Finance Minister of State who is also Chairman of the Federation Account Allocation Committee (FAAC), Alhaji Remi Babalola asserted that the Nigerian economy is poised for a strong economic recovery. He hinged his optimism on the surge in oil production, crude oil price rebound as well as the accommodative monetary policy of the monetary authorities.

He pointed out that “Bonny light price has increased 70 per cent, year-to-date closing at $79 per barrel. Our production level is improving and gradually approaching our OPEC quota level. The major risk and binding constraint to our economic buoyancy in the short-run is the contraction of the credit squeeze.

The Minister therefore urged banks to resume prudent lending immediately as their pivotal role in bolstering the economy cannot be overemphasised. According to him the automatic fiscal policy inherent in our budgetary system and discretionary fiscal stimulus from excess crude releases cannot replace financial intermediation.

“It is only lending activities to small and medium enterprises that can engender growth for the real sector in the long-run and not an unsustainable fiscal stimulant.”

The next Federation Account Allocation Committee (FAAC) meeting is scheduled for 9th and 10th December, 2009 in Abuja.

Please see the details of the October 2009 Disbursements as exclusively provided by the Economic Confidential below on the highest and lowest recipients among the states and what FG and some agencies received:

Read More:

Federation Account: How They Share N332bn in October

The Sharing of N27.8bn on Exchange Rate difference in October 2009

Bridging the Development Gaps on Positive Signs- Remi Babalola