November 22, 2024/FBNQuest Source: FGN
The most recent communique released by the Federation Account Allocation Committee (FAAC) shows that the federation’s revenue disbursements to the three tiers of government amounted to about N1.4trn (US$835m) in October 2024 (from September 2024 revenue). November’s gross distribution represents an increase of +8.7% month-on-month (MoM) or N113bn relative to the previous month’s payout. Excluding the electronic money transfer levy, which declined by -5% MoM to N17.1bn, all other revenue segments recorded m/m increases during the month.
- Statutory revenue and value-added taxes (VAT) grew significantly by +65% MoM and 15% MoM to N206bn and N622.3bn, respectively.
- This growth highlights improvements in revenue collection from sources such as oil and gas royalties, excise and import duties, petroleum profit taxes, and company income taxes.
- For revenue allocations, all three tiers of government received higher MoM disbursements due to the MoM increase in federally collected revenue.
- For context, the federal government’s (FG) share of revenue disbursements amounted to N433bn, N8bn (+2%) higher than the previous month’s payout.
- Additionally, the significant depreciation of the naira against major trade currencies, closing at N1690/USD in October, contributed to a higher exchange difference revenue in November.
- Consequently, the federal and state governments received N259.5bn and N131.6bn, respectively, from the exchange difference of N566bn (up by 23% m/m) in November.
- Furthermore, disbursements to the 36 states of the federation (ex., the 13% derivation for oil-producing states) and local governments increased by +8% m/m for both levels to N491bn and N356bn, respectively.
- Also, the 13% derivation allocation for oil-producing states recorded a significant increase of about N42bn to N132bn.
- In the short term, the portion of revenue derived from the exchange difference will likely remain elevated due to exchange rate volatility, driven by rising FX demand for trade and leisure activities, particularly with the festive season approaching.
