Culled—Proshare
April 27, 2020
by FBNQuest Research
The gross monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to N781bn (US$2.04bn) in April (from March revenue). This was an increase of N199bn on the previous month’s payment, which had been delayed due to finance commissioners’ initial rejection of the offer. It should support the payment of April salaries. The OAGF’s cursory statement following the decision last week noted that receipts from petroleum profit tax, companies’ income tax (CIT), import and excise duty, oil and gas royalties, and VAT were all comfortably higher on the month. 
The gross payout consisted of the statutory allocation of N598bn, the VAT Pool of N120bn and exchange-rate gains of N63bn. The fees and charges of the three tax collection agencies were then deducted before the distribution.
In addition to the usual division between the three tiers, a transfer was made to the North-East Development Commission.
We struggle to explain the strong pick-up in revenue in March beyond the increase in the standard rate of VAT from February. Payments from the VAT Pool were N20bn higher. It is not a peak month in CIT collection, for example.
Nor were we expecting a boost to mineral (oil) revenue in March. Nigerian oil is generally sold three months forwards so the recent crashing of the price should be reflected in June’s revenue in the federation account. In anticipation of a particularly small distribution, President Buhari is said to have authorized the withdrawal of US$150m from the Nigerian Sovereign Investment Authority to supplement the payout from June’s revenue.
Revenue allocations (gross) by the FAAC (N bn)
Sources: Office of the accountant-general of the federation (OAGF); local media; CBN; FBNQuest Capital Research
Full details of FAAC distributions are available on the OAGF website. The most recent, however, date from July 2019 (on June revenue).
