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FAAC allocates N4.63tn in seven months

By on August 28, 2014

Between January and July this year, the Federation Account Allocation Committee withdrew and shared the sum of N4.63tn from the Federation Account to the three tiers of government.

The monthly allocation document obtained by our correspondent on Tuesday also revealed that within the same period, the sum of N4.66tn was collected as gross federally collected revenue from oil and non-oil sources.

The amount was generated from two major revenue sources. They are mineral revenue, made up of crude oil sales, oil and gas royalties, rent, gas flared penalty, petroleum profit tax and gas tax; and non-mineral revenue such as Value Added Tax, corporate taxes, Customs import, excise and fees.

This is despite the serious disruptions to oil production and lifting operations occasioned by multiple leaks, pipeline vandalism and theft that occurred within the first seven months of the year.

In July, the country recorded N154.56 decline in gross federally collected from N784.88bn to N630.32bn received in the previous month.

The Minister of State for Finance, Ambassador Bashir Yuguda, had while briefing journalists at the end of the FAAC meeting last week attributed the decline in revenue to the force majeure declared by Shell and a series of shutdown of trunk lines and pipelines at various export terminals.

He also said the substantial decline experienced by the Federal Inland Revenue Service in Companies’ Income Tax collection contributed to the dip in revenue for the month.

However, a breakdown of the N4.66tn generated within the seven-month period showed that the sum of N540.87bn was generated in January, N666.75bn in February and N614.35bn in March.

For the months of April, May, June and July, the sums of N584.15bn, N844.03bn N784.88bn and N630.32bn were earned for the country, respectively.

On how the N4.63tn was allocated to the three tiers of government, the document revealed that N629.13bn was shared in January, while N641.29bn and N641.38bn were allocated in February and March, respectively.

For the months of April, May, June and July, it stated that N634.72bn, N683.89bn, N755.95bn and N654.58bn were distributed in that order.

But speaking on the country’s revenue structure, the Chairman, Forum of Commissioners, FAAC, Mr. Timothy Odaah, said there was a need to diversify the economy away from oil.

He said the present economic realities had made it imperative to shift the revenue base away from oil since the current dependence on oil revenue was no longer sustainable.

For instance, Odaah said countries such as the United States and China had announced massive cuts in their importation of crude oil from Nigeria.

He said the cut in oil importation by these countries as well as the discovery of shale oil should be a pointer to the government that oil revenue was seriously under threat.

Odaah said, “Our focus on oil is making our economic activities to be monolithic and it is like we are putting all of our eggs in one basket, and when there is a crack, it will affect all.

“So all states, especially now that we don’t have enough funds, should embark on projects that are revenue yielding for the purpose of creating employment and that will reduce the crisis that we have now.

“There is nobody who is gainfully employed that will like to get involved in Boko haram activities. Employment is necessary but it cannot come if we don’t have income. We should transform the pattern of our industrialisation and our investments.”

 

 

[Punch]