Home News Finance FAAC: Shares N1.088trn with Federal, States & LGs

FAAC: Shares N1.088trn with Federal, States & LGs

FAAC Shares N1.088trn to Federal, States & LGs

All tiers of government rely on funds from the federation account to fund development projects. According to Section 165 of the Federal Republic of Nigeria 1999 Constitution and the Allocation of Revenue (Federation Account, etc.) Act No.1 1982, federal government revenues must be credited to the federation account and distributed among the three tiers of government every month per the Revenue Act of 1982. FAAC then sets up a review, and while adoption follows deduction, disbursement takes place.

In November, the Federation Account Allocation Committee shared the sum of N1.8 trillion with the Federal Government, States, and Local Government Councils.

According to a final statement of allocation released after the FAAC Plenary Meeting held on Friday in Abuja, a payment generation is established, mandating the CBN to disburse the funding originating from November 2023 Federation Account earnings in favour of the relevant beneficiaries.

The distributable revenue of N1.088 trillion was made up of N376.306 billion from the distributable statutory revenue, N335.656 billion from the distributable Value Added Tax, N11.952 billion from the distributable Electronic Money Transfer Levy, and N364.869 billion from the exchange difference. The communiqué states that November 2023 brought in a total revenue of N1.620 trillion.

FAAC Review and Adoption

After FAAC reviewed the allocation, the Review and Adoption of Allocation are carried out in 2 major stages, first by a Technical Sub-committee of FAAC. This is chaired by the Accountant General of the Federation and the Accountant Generals of the 36 states, as well as relevant RGAs who collectively scrutinize the allocations, proposed deductions, proposed cost of collections and reports from the Office of Accountant General preliminary allocations.

FAAC Deduction Management

As tasked by FAAC Deduction Management, it is worth noting that deductions are processed when they become available during the FAAC sessions. This means that after the deduction is approved by the Honorable Minister of FBNP and is successfully processed, the Home Finance Department forwards the original file to the OAGF, who carries out the deduction. The deduction is then approved at the FAAC meeting and remains in effect until the end of its tenure, unless otherwise decided at a later FAAC meeting. But this is executed after the review and adoption of FAAC.

Therefore, deductions for the cost of collection totaled N60.960 billion from gross revenue, while total transfers, interventions, and refunds came to N470.592 billion.

For November 2023, N882.560 billion in gross statutory revenue was received.

According to a statement issued by Bawa Mokwa, Director of Press and Public Relations, this sum exceeded the N660.090 billion received in October 2023 by N222.470 billion.

In November 2023, the Value Added Tax yielded a gross revenue of N360.455 billion.

Additionally, it was N13.112 billion more than the N347.343 billion accessible in October 2023.

FAAC Disbursement

According to the communiqué, the Federal Government got N402.867 billion, the State Governments got N351.697 billion, and the Local Government Councils got N258.810 billion out of the N1.088 trillion total distributable revenue as a disbursement service of FAAC.

Derivation money totaling N75.410 billion, or 13% of mineral revenue, was distributed to the oil-producing states that benefited from it.

The federal government received N174.908 billion, state governments received N88.716 billion, and local government councils received N68.396 billion from the N376.306 billion distributable statutory revenue while the beneficiary states received N44.286 billion, or 13% of the total revenue from minerals, as derivation money.

Source: NAN

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