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Federation Revenue Drops As  FG, States Share N443 Billion Allocation In July

Finance Minister, Kemi Adeosun
Finance Minister, Kemi Adeosun

The monthly allocation to the three tiers of government dropped to N443.663 billion in July from N559.032 billion the previous month.

This was the outcome of the Federation Account Allocation Committee, FAAC, meeting held in Abuja.

Last month’s allocation had triggered jubilation and predictions from some quarters that the July disbursements will be higher.

But the Permanent Secretary of the Finance Ministry, Mahmoud Isa-Dutse, attributed the fall to the 2.8 million barrels drop in the volume of crude oil sold in April.

Isa-Dutse also noted that Lagos state will not start benefiting from the 13 per cent derivation until revenue from the sale of crude oil from the Lagos wells start accruing into the federation account.

“The money has not started coming in yet. It’s only when revenue is realised that Lagos will start benefiting from the 13 per cent derivation,” he said.

It was also revealed that part of the amount shared for July was the N1.373 billion recovered from banks as excess charges from 2008 to 2012.

Isa-Dutse stated that the FAAC engaged the services of a consortium to determine “the true status of the bank charges collected on government funds saved with commercial banks.”

“At the end of their assignment, it was discovered that some banks over charged the government and they were told to refund the money,” he said.

Another extra accrual into the federation account was the N36.494 billion exchange gain arrears for May 2016.

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In the month of July, N268.772 billion was shared as statutory fund; N66.987 as Value Added Tax; N70.037 billion as exchange gain; N36.494 billion as exchange gain arrears and N1.373 as excess bank charges recovered.

From Statutory revenue, Federal Government received N129.212 billion or 52.68%; States received N65.538 billion or 26.72%; Local Government Councils received N50.527 billion or 20.60%; while the Oil Producing States received N12.874 billion as 13% derivation revenue.

The amount in the excess crude account (ECA) now stands at $3.03 billion.

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