The Federation Accounts Allocation Committee (FAAC) has shared a whopping N1.727 trillion among the Federal Government, state governments, and Local Government Councils (LGCs) for November 2024.
This revenue sharing comes as Nigeria continues to navigate economic challenges, with fluctuating oil prices and a pressing need for funds to support governance at all levels.
In a communiqué issued after its meeting in Abuja on Thursday, FAAC detailed the sources of the revenue and the breakdown of allocations to each tier of government.
According to the document, the total distributable revenue comprised statutory revenue of N455.354 billion, Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion, and Exchange Difference revenue of N671.392 billion.
Despite these substantial numbers, some sources of income, such as VAT and taxes, recorded significant declines compared to October.
For November, the total gross revenue available was N3.143 trillion.
Out of this, N103.307 billion was deducted as the cost of revenue collection, while N1.312 trillion was marked for transfers, interventions, and refunds.
This left N1.727 trillion for distribution, making it one of the largest allocations this year.
In comparison, the gross statutory revenue for November was N1.827 trillion, which represented a significant increase of N490.339 billion from the N1.336 trillion recorded in October.
Out of the N1.727 trillion, the Federal Government received N581.856 billion.
The states collectively got N549.792 billion, while the Local Government Councils were allocated N402.553 billion.
Additionally, N193.291 billion was shared among the oil-producing states as derivation revenue.
The communiqué further explained the breakdown of statutory revenue of N455.354 billion.
The Federal Government’s share was N175.690 billion, while states received N89.113 billion.
Local governments received N68.702 billion, and oil-producing states got N121.849 billion as 13% derivation revenue.
While the revenue figures might appear impressive, some key sources showed a downturn.
Gross VAT revenue for November stood at N628.972 billion, which was N39.318 billion lower than the N668.291 billion recorded in October.
The communiqué also noted significant decreases in Excise Duty, Import Duty, VAT, Petroleum Profit Tax, and Companies Income Tax.
“Oil and Gas Royalty and CET Levies, however, recorded notable increases,” the report added.
This mixed revenue performance highlights the volatile nature of Nigeria’s economic structure, heavily reliant on oil while struggling to diversify its revenue base.
From the VAT pool of N585.700 billion, the Federal Government received N87.855 billion.
The states received N292.850 billion, while LGCs got N204.995 billion.
For the EMTL revenue of N15.046 billion, N2.257 billion went to the Federal Government.
States and local councils received N7.523 billion and N5.266 billion, respectively.
The reduced VAT and EMTL figures have raised concerns about the efficiency of tax collection and the need for reforms to boost non-oil revenue streams.
This record-high distribution is a double-edged sword for Nigeria.
On one hand, it provides much-needed funds for states and councils to address pressing developmental needs.
On the other hand, the declining performance of critical tax and revenue categories highlights the nation’s fragile financial base.
A state government official who preferred anonymity said, “The increase in oil royalties is a temporary relief. If we do not fix our tax systems and expand the economy, future allocations will drop again.”
The Federal Government and state governors now face the critical task of ensuring the allocated funds are used efficiently.
Many Nigerians are calling for transparency in how these resources are deployed, especially as the country grapples with economic recovery and rising unemployment.
Civil society organizations have also urged FAAC to improve its reporting mechanisms to give Nigerians clearer insights into how these revenues are utilized.
For now, the N1.727 trillion allocation is a moment of relief, but the challenges of sustaining and growing the revenue base remain daunting.
As one Lagos-based commentator put it, “Sharing money is good, but what are we doing to ensure that next month’s allocation doesn’t depend on luck?”
