The total amount shared to the three tiers of government fell to N605.69bn from N616.88bn in May. This was partly due to a decline in statutory revenue by 13.9% to N428.20bn from N497.39bn. The fall in FAAC allocation can also be attributed to continued subsidy payments.
The NNPC had earlier hinted at zero remittance to the monthly statutory account as it maintained its N120bn monthly payments to subsidize petrol. With oil prices at $75pb, subsidy payments are estimated to have increased to N500bn monthly.
In addition, Company Income Tax (CIT), oil & gas royalties, and import and excise duty also decreased in the month of May.
However, VAT revenue rose by 2.49% to N181.1bn from N176.7bn. FAAC disbursements are likely to pick up in the coming months on higher oil receipts and exchange rate gains, although the increase may be capped by the NNPC’s low to nil remittance. Higher statutory allocations will support state governments in meeting their internal obligations like salary payments.
Many state governments such as Ekiti state have reverted to the old minimum wage of N18,000 minimum and cut executive salaries by 25% due to financial constraints