FAAC shared ₦3.879 trillion in H1 2020

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FAAC shared ₦3.879 trillion in H1 2020

The Federal Allocation Account Committee’s (FAAC) disbursements for the first half of the year was ₦3.8 trillion. The federal government received ₦1.53 trillion; states, ₦1.29 trillion; and local government, ₦771.34 billion.

Compared to the first half of 2019, each of the allocations is 4%, 2.8% and 2.6% lower respectively. President Buhari approved $150 million from NSIA stabilisation fund in April to supplement the allocations, owing to falling revenues.

On total net FAAC disbursements and deductions for states for the first half of 2020, Osun State had the lowest net disbursement of N13.13 billion, while Delta State had the highest net disbursement of N100.81 billion.

Delta State received seven times the disbursement that Osun State received.

According to the report total net disbursements received by Delta State, N100.81 billion was higher than the combined total net disbursements of N99.47 billion received by six states – Osun, Cross River, Plateau, Ogun, Gombe and Ekiti.

Also, the combined total net disbursements of N321.29 billion received by the four highest receiving states of Delta, Akwa Ibom, Rivers, and Bayelsa were higher than the combined total net disbursements of N314.08 billion received by 16 states – Osun, Cross River, Plateau, Ogun, Gombe, Ekiti,  Zamfara, Kwara, Nassarawa, Ebonyi, Taraba, Benue, Adamawa, Ondo, Bauchi, and Abia. While Lagos State had the highest deductions, Yobe State had the lowest.

According to the FAAC disbursement data released by the National Bureau of Statistics (NBS), the Federation Account Allocation Committee (FAAC) disbursed the sum of N547.31bn to the three tiers of government in June 2020 from the revenue generated in May 2020.

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From the released data, the amount disbursed comprised of N413.95bn from the Statutory Account, N103.87bn from Valued Added Tax (VAT), N1.01bn from Excess Bank Charges Recovered for the Month and N28.47bn Exchange Gain Differences.

The total FAAC disbursements in the second quarter of 2020 were slightly lower than the N1.945 trillion disbursed in the first quarter of 2020.

On the distribution to the tiers of government, the Federal Government received a total of N219.80bn from the N547.31bn. States received a total of N152.47bn and Local governments received N114.09bn. The sum of N37.02bn was shared among the oil-producing states as 13% derivation fund.

Meanwhile, revenue-generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.24bn, N7.09bn and N1.98bn respectively as cost of revenue collections.

The 0.55 per cent decrease in second-quarter 2020 to a couple of factors, namely: rebound in oil prices in the second quarter as a result of ease of lockdowns by countries across the world and the adjustment of the official exchange rate by the CBN from N307 to a dollar, to N360 to a dollar in March, resulting in higher naira disbursements.