April 24, 2024/FBNQuest Research
In a recent communique released by the Federal Account Allocation Committee (FAAC), the federation’s revenue disbursement to the three levels of government amounted to N1.1trn (US$867.2m) in April 2024 (from March 2024). The gross payout represented a slight decrease of N30bn or (-3% m/m) compared to the preceding month’s payout. The consecutive monthly rise in FAAC allocations in September 2023 ended with a reduction in March’s revenue disbursement.
- The M-o-M fall in distributable revenue was primarily due to a decline in foreign exchange rate gain, which more than halved M-o-M to NGN285bn.
- Given that the expansion in FAAC disbursements was mainly due to gains from currency depreciation and the recent recovery of the Naira exchange rate, we had anticipated lower distributable revenue to the three tiers of government.
- To put into context, improved FX liquidity resulted in a 21.8% m/m appreciation of the Naira on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window in March.
- Revenue from electronic money transfer levies declined by -2% m/m to N14bn, contributing to lower revenue disbursements.
- However, statutory revenue more than doubled m/m to N311bn, higher than N101bn received in the previous month.
- Additionally, revenue from value-added-tax also increased by +19% m/m to N511bn.
- A further look at the communiqué shows improved revenue collections from import duty, gas royalty and companies’ income tax relative to the previous month.
- Regarding revenue allocations, the Federal Government’s (FG) share of revenue disbursements amounted to N345bn, lower than the N352bn distributed the previous month.
- Similarly, the revenue share for oil-producing states, known as the 13% derivation, almost halved m/m to N90bn.
- In contrast, disbursements to the 36 federation states (ex.13% derivation for oil-producing states) and local governments increased by N31bn and N22bn to N398bn and N289bn, respectively.
