Business/ECONOMY
Though revenue, totaling N5.76 trillion,
flowed into the coffers of the federal and state governments in 2018
from the federation account, more than the preceding year, the drive to
grow revenue from independent sources by states recorded a drop, while
debt remains a huge burden at N22.428 trillion, reports Bamidele Famoofo
Revenue shared by the federal government
and the states in 2018 was put N5.76trillion, which
represents an
increase of N1.57trillion over N4.17trillion total revenue shared from
the commonwealth of Africa’s largest economy.
The amount drawn from the federation
account and shared among both the federal and state governments in the
fiscal year ended December 31, 2018 represented 67 per cent of funding
for the N8.6 trillion budget for fiscal 2018.
Going by figures provided by the
National Bureau of Statistics (NBS), the government at the centre got
N3.19trillion representing over 55 per cent of the total amount shared.
That amount represented about 50 per cent of funding for the 2018
budget. On the other hand, government at the state level which also
includes the Federal Capital Territory (FCT) shared N2.57 trillion or
44.6 per cent of the lump sum.
Compared to disbursements made by the
Federation Account Allocation Committee (FAAC) in 2017, total revenue in
the review fiscal period recorded an increase of N1.57trillion or 38.13
percent from N4.17trillion in 2017 to N5.76trillion.
Breakdown of FAAC revenue sharing showed
that the Federal government received about N810billion above the
N2.38trillion in 2017. It represents a 34 percent revenue growth. The
states got more in real terms with total revenue increasing to
N2.57trillion in 2018 from N1.79trillion in 2017. It represented about
44 percent or N780billion boost in total revenue.
Revenue Components
There are four major sources from which
the FAAC is financed. They are the statutory allocation purse, value
added tax (VAT), NNPC refund and forex equalisation fund. Though the
statutory allocation is a major contributor to the pool of fund shared
by the FAAC, the forex equalisation fund made the most improved
contribution to the pool in the review period with revenue increasing by
430 per cent from N24.24billion in 2017 to N128.41billion in 2018.
Funds contributed from net statutory allocation to the pool increased
from N2.12 trillion in 2017 to N2.8trillion as at end of December 31,
2018, representing an increase of 32.1 per cent while VAT contribution
to the revenue purse moved up 12.7 per cent from N139.39 billion to
N156.98billion in 2018. The growth in VAT contribution has been
attributed to the renewed effort by government to drive revenue through
taxation. Also, the revenue improvement in statutory allocation could be
traced to improved oil price in the international market, which boosted
government revenue in 2018.
Meanwhile, an appreciable decline was
recorded in the NNPC refund to go the federal government in the review
fiscal year with revenue dropping by 67.4 per cent from N32.74billion in
2017 to N10.66billion in 2018.
Disbursement
The month of May in 2018 recorded the
biggest revenue growth when compared to the value distributed in the
comparable period in 2017. Revenue shared by FAAC to both the federal
and state governments increased by 82 per cent from N148.30billion in
2017 to about N270billion in 2018. On the top five charts, January
recorded a growth of 66 per cent from N158.87billion in January 2017 to
N262.92billion in the same period in 2018. With a 53 per cent increase
in revenue in 2018 compared to 2017, the month of March was the third
most favourable month for government as regards revenue growth while in
June and August; revenue grew by 51 per cent and 50 per cent
respectively. In June 2018, FAAC shared N263.04billion, a 51 percent
rise over N174.34billion distributed among the three tiers of government
in the same period in 2017 while the N266billion shared in August
represented a 50 percent increase compared to N177billion in the period
in the preceding year.
Meanwhile, the month of July was the
month in 2018 when FAAC members shared the biggest revenue. Revenue
distributed among members in the month stood at about N296billion, the
largest chunk in the year.
Delta and Akwa Ibom States received the
highest allocation of N213.63billion and N202.37billion respectively in
2018 while Osun and Cross River States received the least allocation of
N22.84billion and N36.95billion.
Summary of 2017 distribution showed that
the Federation Account Allocation Committee disbursed the sum of
N2.38trillion to the Federal Government of Nigeria in 2017 while states
received a total of N1.79trillion within the period under review.
The amount disbursed to the FGN
comprised of N2.12trillion as Gross Statutory Allocation, N139.39billion
as Valued Added Tax (VAT), N32.74billion as NNPC refund to FG and the
distribution of N24.24billion from the Forex equalisation fund.
In like manner, Akwa Ibom and Rivers
States received the highest allocation of N143.61billion and
N119.63billion respectively in 2017 while Osun and Cross River States
received the least allocation of N10.44billion and N23.45billion.
2019
Fiscal 2019 looks promising for
government as FAAC disbursed the sum of N649.19billion to the three
tiers of government in January 2019 from the revenue generated in
December 2018.
The amount disbursed comprised of
N547.46billion from the statutory account, N100.76billion from VAT and
N976.53million exchange gain differences.
“Federal government received a total of
N270.17billion from the N649.19billion. States received a total of
N178.04billion and local governments received N133.83billion. The sum of
N45.36billion was shared among the oil producing states as 13per cent
derivation fund,” statistics from NBS showed.
Revenue generating agencies such as
Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and
Department of Petroleum Resources (DPR) received N4.69billion,
N4.04billion and N8.04billion respectively as cost of revenue
collections.
Further breakdown of revenue allocation
distribution to the Federal Government of Nigeria (FGN) revealed that
the sum of N216.57billion was disbursed to the FGN consolidated revenue
account; N4.81billion shared as share of derivation and ecology;
N2.43billion as stabilisation fund; N8.15billion for the development of
natural resources; and N5.82billion to the Federal Capital Territory
(FCT) Abuja.
IGR
Statistics provided by NBS suggests that
while distributable revenue from the federation account increased in
2018, efforts by government at the state level may not be doing enough
to boost revenue from internal sources as Internally Generated Revenue
(IGR) as at third quarter in 2018 recorded a decline.
“The Q3 2018 states and FCT IGR figure
hits N264.38billion compared to N279.78billion recorded in half year
2018. This indicates a negative growth of -5.08 percent quarter on
quarter.”
Meanwhile, 17 states recorded growth in IGR while 20 states recorded decline in IGR quarter on quarter at the end of Q3 2018.
Meanwhile, full year 2017 state IGR
figure stood at N936.47billion compared to N823.16billion recorded in
year 2016. This indicates a growth of 13.77percent year on year. At the
end of half year 2017, total revenue generated by states was put at
N453.83billion as against N482.64billion in half year 2016.
Debt
Data from the Debt Management Office
revealed that Nigeria’s total public debt stock stood at N22.428
trillion in 2018, having risen from N21.725 billion it ended 2017.
According to DMO, the value of foreign debt stock was $21.591billion
(N6.614 trillion) while domestic debt hit N15.814 trillion at the end of
2018, compared to the positions at the end of 2017, when foreign debt
stock was $18.913 billion (N5.787 trillion) and domestic debt stood at
N15.937 trillion.
Threat
There are assurances that Nigeria will
sustain its current revenue level from oil, going by the plan by OPEC to
cut oil production according to a statement recently credited to
President Muhammadu Buhari.
Buhari spoke in Abuja when he received
the Special Envoy of King Salman Bin Abdulaziz, Minister of State for
African Affairs of the Kingdom of Saudi Arabia at the State House. A
statement by the Senior Special Assistant to the President on Media and
Publicity, Mr. Garba Shehu, quoted Buhari as saying that, “As a
responsible member of the Organisation of Petroleum Exporting Countries
(OPEC), Nigeria was willing to go along with the Saudi initiative in
limiting output so that prices would go up.” The statement said the
president wished that there was no need for cut because of Nigeria’s
large population and the need to secure more money, stating, “I wish we
can produce more.” However, he assured the envoy of Nigeria’s support
for the initiative, saying, “I have listened carefully to the message. I
will speak with the minister of state for petroleum. I will call for
the latest production figures. I know that, it is in our interest to
listen. We will cooperate.”
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