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FG, states, LGs shared N7.75tn in 2014

By on February 12, 2015

The Federation Accounts Allocation Committee shared a total sum of N7.75tn among the three tiers of government in the 2014 fiscal period.

An analysis of the monthly distribution made available to our correspondent on Tuesday also showed that the amount distributed last year represented a decline of N150bn or 1.89 per cent over the N7.9tn, which the committee allocated in the 2013 fiscal period.

The committee, headed by the Minister of State for Finance, Ambassador Bashir Yuguda, is made up of commissioners of finance from the 36 states of the federation; the Accountant-General of the Federation, Mr. Jonah Otunla; and representatives of the Nigerian National Petroleum Corporation.

Other members are the representatives of the Federal Inland Revenue Service; the Nigeria Custom Service; Revenue Mobilisation, Allocation and Fiscal Commission and the Central Bank of Nigeria

The Federation Account is currently being managed on a legal framework that allows funds to be shared under three major components – statutory allocation, Value Added Tax distribution and allocation made under the derivation principle.

Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments, 20.60 per cent.

The framework also provides that VAT revenue be shared thus: Federal Government, 15 per cent; states, 50 per cent; and local governments, 35 per cent

Similarly, extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.

A breakdown of the N7.75tn figure for 2014 showed that the month of June had the highest allocation of N755.95bn, while September with N693.53bn, and May with N683.89bn, followed.

The sum of N621.12bn was allocated in January; N641.29bn in February; while N641.38bn, N634.72bn and N654.58bn were distributed in March, April and July, respectively.

For the months of August, October, November and December, the committee distributed N611.76bn, N593.34bn, N628.77bn and N580.37bn in that order.

On the revenue side, investigation revealed that the country generated N7.29tn in 2014 from oil and non-oil sources.

A breakdown of the revenue showed that the highest receipt of N844.03bn was made in May, while June, with N784.88bn, and February, with N666.75bn, followed in that order.

Further findings showed that a gross revenue of N540.87 was earned by the country in January, while March, April and July had N614.35bn, N584.15bn and N630.32bn respectively.

For the months of August, September, October, November and December, the country generated N601.65bn, N502.09bn, N536.69bn, N500.07bn and N490bn, respectively.

The Federal Ministry of Finance, the commissioners of finance and accountants-general of the 36 states of the federation have commenced the process to reduce the high cost of governance following the continuous decline of global oil prices.

The need to prune expenditure, according to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, is borne out of the fact that persistent drop in oil prices has continued to have a negative impact on the revenue of the government.

 

[Punch]