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Tag: FAAC

  • Drop in revenue threatens planned share of N5.7tr from FAAC

    Drop in revenue threatens planned share of N5.7tr from FAAC

    The Federation Account Allocation Committee’s (FAAC’s) plan to share N5.7 trillion to the three tiers of government within the year is under threat, FBN Quest has reported.

    A report by FBN Quest, the investment and research arm of FBN Holdings, said the cash was expected from the net distribution of the Federation Account and the Value Added Tax (VAT).

    The report titled: “Another poor payout by the FAAC” said the payout to the three tiers of government amounted to N420 billion ($1.38 billion) this month (from last month’s revenues). The figure remains below the forecast pro- rata monthly average of N477 billion for this year budget, which projects the net distribution from the Federation Account and the VAT pool combined at N5.72 trillion.

    It said crude oil price crash has in recent months hit the FAAC cash, leading to the drop in  the allocation and the inability of many states to honour recurrent obligations, including salaries and pension liabilities, as well as capital obligations, adding that both mineral and non-mineral revenues were below par last month, resulting in the lowest distribution for five months.

    Last month, the Federal Government warned that revenues would again be low because of the three-month lag in the accounting treatment of mineral revenues. The argument was that sabotage of oil industry installations was acute in June and July.

    The national accounts for the third quarter of the year, however, indicated that crude output may not have recovered in the balance of the third quarter after the FAAC meeting which suggested that the volume of import duty and the collection of companies’ income tax also ended in disappointment in October.

    The research firm said the statutory distribution of N239 billion was supplemented by excess petroleum tax payments of N109 billion, an exchange-rate gain of N37 billion, the regular Nigeria National Petroleum Corporation (NNPC)  “refund” of N6 billion and VAT.

    It said the three previous distributions were boosted by the impact of the Central Bank of Nigeria (CBN) ‘devaluation’ on June 20, adding that both petroleum receipts based on the US dollar price and Customs revenues benefited from the adjustment.

    The CBN had abandoned a 16-month currency peg on June 20 and adopted flexible foreign exchange policy, which gave the naira greater flexibility to adjust against the dollar. The ‘devaluation’ of the naira was meant to provide the much-desired stimulus and foreign portfolio investment needed to boost investments in the capital market.

    The drop in FACC revenues was also caused by the state of force majeure declared at the Bonny terminal and the subsisting force majeure at the Forcados terminal as well as the drop in non-mineral revenue in September.

    Analysts insist the oil price crisis resulted from drastic, adverse structural shift in the global market demand and supply of oil and gas. International market price of oil dropped by about 43 per cent from an average of about $100.35 for the 12 months of 2014 to an average of $57.20 for the first six months of last year and closed at $47.44 per barrel on Monday ahead of OPEC meeting in Vienna, today.

  • FAAC payout drops by N90b in October

    FAAC payout drops by N90b in October

    Total payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government decreased by N90 billion in October, from N420 billion in September, FBNQuest has said.

    In a  report, FBN Quest, the investment and research arm of FBN Holdings, said crude oil price crash hit the FAAC cash, leading to the drop in  the allocation and the inability of many states to honour recurrent obligations, including salaries and pension liabilities, as well as capital obligations.

    FBNQuest said the statutory distribution of N251 billion was supplemented by excess petroleum tax payments of N63 billion, an exchange-rate gain of N41 billion, the regular Nigeria National Petroleum Corporation (NNPC) refund of N6 billion and an undisclosed amount from Value Added Tax (VAT).

    The report titled:  ‘A marked decline in the FAAC payout’, said the figure fell below the forecast pro rata monthly average of N477 billion in the 2016 budget, which projects the net distribution from the Federation Account and the VAT pool combined at N5.72 trillion, for the first time in four months.

    It said the three previous distributions were boosted by the impact of the Central Bank of Nigeria (CBN) ‘devaluation’ on June 20, adding that both petroleum receipts based on the US dollar price and customs revenues benefited from the adjustment.

    The Central Bank of Nigeria (CBN) had abandoned a 16-month currency peg on June 20 and adopted flexible foreign exchange policy, which gave the naira greater flexibility to adjust against the dollar. The ‘devaluation’ of the naira was meant to provide the much-desired stimulus and foreign portfolio investment needed to boost investments in the capital market.

    The drop in FACC revenues was also caused by the state of force majeure at the Bonny terminal and the subsisting force majeure at the Forcados terminal as well as the drop in non-mineral revenue in September.

    However, the Excess Crude Account (ECA) balance stood at $2.45 billion and compromised part of official reserves, which amounted to $23.91 billion as at October 21.

    Analysts insist the oil price crisis resulted from drastic, adverse structural shift in the global market demand and supply of oil and gas. International market price of oil dropped by about 43 per cent from an average of about $100.35 for the 12 months of 2014 to an average of $57.20 for the first six months of last year and closed at $51 on Monday.

  • Bayelsa gets N8.7bn from FAAC in August

    The Bayelsa State Government, at the weekend, said it received N8.7bn gross inflow from the Federation Account Allocation Committee (FAAC) in August.

    Speaking at the monthly Transparency briefing in Yenagoa, the state Deputy Governor, Rear Admiral John Jonah (retd), also said the government of Seriake Dickson never at any point collected foreign loans.

    Breaking down the allocation for August, he said the revenue comprised derivation of N2.8bn; statutory allocation N1.5bn; budget support of N1.3bn and exchange differential of N1.4 billion.

    He said FAAC deductions stood at N2.3bn, consisting of bond, N1.2bn;  restructured commercial bank loans, N741million; commercial agriculture loan schemes, N161 million; Excess Crude Account loan N126million and foreign loan N21million.

    Jonah said that, the total funds available for spending following a net inflow of N6.7billion and internally generated revenue (IGR) of N560million for the month of July stood at N7.02bn

    The deputy governor declared a deficit balance of N1.9bn after a total expenditure of N8.9bn.

    He said N1.4bn was spent on bank loans; civil servants’ salaries, N2.1 billion; capital payment, N3.2bn; recurrent payment, N1.4bn; political appointees, N472million.

    He insisted that the government never incurred any foreign loan to finance any development projects and programmes since the inauguration of the present administration of Dickson in 2012.

    He said the government made attempts to secure a foreign loan to fund the Maritime Academy facility at Okpoama in Brass local government area, but failed to obtain it because the federal government could not guarantee the deal.

    Earlier in his remarks, the Commissioner for Information and Orientation, Mr. Jonathan Obuebite, reassured that, the government would continue to keep faith with the transparency initiative to promote good governance.

  • Fed Govt, states, local govts share N510.270b

    Fed Govt, states, local govts share N510.270b

    Disbursements to the three tiers of government jumped to N510.270 billion for August.

    At the end of the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja yesterday, the Federal Government received N149.310 billion, the states got N75.732 billion, local governments pocketed N58.386 billion while N20.293 billion was shared as 13 per cent mineral revenue derivation.

    Also shared were proceeds from the Value Added Tax (VAT) from which the Federal Government received N10.939 billion, states N36.462 billion and local governments N25.523 billion. An additional N84.263 billion was shared as exchange gains, N35 billion as excess petroleum profit tax (PPT) while N6.330 billion was refunded to the government by the Nigeria National Petroleum Corporation (NNPC).

    The balance to make up the N510.270 billion was what was given to the collecting agencies as cost of collection. Nigeria Customs Service (NCS) got N4.033 billion, FIRS N4.663 billion, Department of Petroleum Resources (DPR) N2.627 billion.

    Addressing reporters at the end of the meeting, Finance Minister, Mrs Kemi Adeosun, said the gross statutory revenue of N315.045 billion received for the month was higher than the N287.819 billion received in the previous month by N27.226 billion.

    She added that crude oil export volume increased by 2.2 million barrels in May,  despite the brief force majeure declared at Qua Iboe and Bonny terminals and a subsisting force majeure at Forcados Termibal.

    Other terminals also experienced problem of shut-in and shut-down of pipelines for repairs and maintenance. However, revenue was boosted with the $109.40 million accruals in export sales as a result of the increase in average price of crude oil from $42.21 in April to $46.06 per barrel in May.

    A rise in the volume of dutiable imports contributed significantly to the increase recorded by import duty and VAT while the increase in PPT collections was attributed to receipts from National Petroleum Development Company (NPDC) and Joint Venture operators. The exchange rate regime, the minister said, “helped boost revenue for the current revenue including oil and gas royalty’’.

    She also announced that he Excess Crude Account (ECA)  stands at $2.9 billion.

  • FAAC: Oyo, Lagos, others shared N76,349b in May’

    The Federal Account Allocation Committee (FAAC) last monthsaid it shared a total of N76,349,365, 060.79 to the 36 states of the federation.

    Lagos got the lion’s share of N6,082,690, 933.64 while Oyo State  got  N2,105,441,605.75.

    The allocations were shared in June as revenue collections accrued to the account in May.

    Lagos was closely followed by Rivers which collected N4,354,473,497.62, including the 13 per cent share of derivation and Value Added Tax (VAT) allocations.

    The total net allocations were made after deductions from contractual and other obligations by some of the states including Bayelsa, Bauchi and Benue.

    Abia got N1,923,982,456.53 while Adamawa had N1,828,758,173.61 with Akwa-Ibom collecting N6,847,573, 681.87,  as Anambra got N2,116,807,667.14 during the period;

    The figures further showed that Bauchi State made N1,965,255,213.47;Bayelsa, N2,816,868,014.70; Benue, N1,534,960,334.09; Borno, N2,147,600,578.02 and Cross River, N804,060,982.38 in June.

    According to the  News Agency of Nigeria (NAN), Delta received N2,890913, 486.26 after deductions from some contractual obligations while Ebonyi got N1.843,573,739.61 from the Federation Account.

    Edo, which also collected allocations from the 13 per cent derivation account, had a total of N1,162,645,899.11 as Ekiti got N903,602,952.88 from the account.

    Enugu got N2,003,137, 942.20;  Gombe had N1,237, 565,490.87; while Imo got N1,872, 879,765.17 from the revenues realised by the Federal Government.

    Jigawa also had its own share of N2,339,773,705.98, Kaduna got N2,537,735,912.75; Kano-N3,233,171496.48 while Katsina State made N2,397, 831,082.43.

    Kebbi received N1,978,817, 185.53; Kogi-N1,800,713, 440.93; Kwara, N1,554,650, 906.93; Nasarawa, N1,738,115 545.39 and Niger, N1,795,229, 811.70 as allocations for May.

    Ogun realised N935,421, 032.61; Ondo, N1,765,753, 396.69; Osun, N2,105,441, 605.75; Plateau-N1,033,584, 304.35 with Sokoto making N2,165,593,899.10 just as Taraba got N1,712,426,074.23.

    Yobe, without record of contractual obligation, made N1,999,612,020.31 while Zamfara which had deductions from some obligations, got N1,242,750,215.67.

    The FAAC is responsible for the distribution of revenue accruing to the  Federation Account among the federal, states and the local governments.

  • ‘How FAAC shared May revenue to states’

    ‘How FAAC shared May revenue to states’

    Lagos got the lion’s share of N6,082,690, 933.64 in last month’s allocation to states by the Federal Account Allocation Committee (FAAC).

    The allocations were shared in June as revenue collections accrued to the account in May.

    The state was closely followed by Rivers which collected N4,354,473,497.62, including the 13 per cent share of derivation and Value Added Tax allocations.

    The total net allocations were made after deductions from contractual and other obligations by some of the states including Bayelsa, Bauchi and Benue.

    Abia got N1,923,982,456.53 while Adamawa had N1,828,758,173.61 with Akwa-Ibom collecting N6,847,573,681.87,  as Anambra got N2,116,807,667.14 during the period;

    The figures further showed that Bauchi State made N1,965,255,213.47;Bayelsa, N2,816,868,014.70; Benue, N1,534,960,334.09; Borno, N2,147,600,578.02 and Cross River, N804,060,982.38 in June.

    According to the  News Agency of Nigeria (NAN), Delta received N2,890913, 486.26 after deductions from some contractual obligations while Ebonyi got N1.843,573,739.61 from the Federation Account.

    Edo, which also collected allocations from the 13 per cent derivation account, had a total of N1,162,645,899.11 as Ekiti got N903,602,952.88 from the account.

    Enugu got N2,003,137,942.20;  Gombe had N1,237,565,490.87; while Imo got N1,872, 879,765.17 from the revenues realised by the Federal Government.

    Jigawa also had its own share of N2,339,773,705.98, Kaduna got N2,537,735,912.75; Kano-N3,233,171496.48 while Katsina State made N2,397, 831,082.43.

    Kebbi received N1,978,817, 185.53; Kogi-N1,800,713, 440.93; Kwara, N1,554,650, 906.93; Nasarawa, N1,738,115 545.39 and Niger, N1,795,229, 811.70 as allocations for May.

    Ogun realised N935,421, 032.61; Ondo, N1,765,753, 396.69; Osun, N2,105,441, 605.75; Plateau-N1,033,584, 304.35 with Sokoto making N2,165,593,899.10 just as Taraba got N1,712,426,074.23.

    Yobe, without record of contractual obligation, made N1,999,612,020.31 while Zamfara which had deductions from some obligations, got N1,242,750,215.67.

     

  • ‘Why FAAC payout dropped to N345b’

    •IMF seeks VAT review

    Analysts at FBN Quest, an investment and research firm,have explained why the monthly payout by the Federation Account Allocation Committee (FAAC) to the three tiers of government in March from February revenues declined to N345 billion.

    A report by the firm said the decline from N370 billion the previous month was due to oil and gas pipeline vandalisation. It said the payout for last month fell below the projected pro rata monthly average of N477 billion.

    The report titled: ‘Another low payout by FAAC’ released at the weekend, blamed the vandalisation at Escravos terminal and force majeure declared at Brass terminal, which led to the shutdown of pipelines at other terminals for repairs and maintenance for the revenue shortfall.

    Other reasons adduced  are the substantial drop in revenue from oil and gas royalty, companies’ income tax and import duty.

    According to the 2016 to 2018 expenditure framework, the net distribution from the federation account and the Value Added Tax (VAT) pool combined is projected at N5.72 billion this year.

    However, the Federal Ministry of Finance announced after the FAAC meeting that the balance in the excess crude account increased very marginally to $2.259 billion from $2.258 previously recorded.

    The crude oil price averaged $34.2/barrel in February, compared with $33.7/barrel the previous month.

    “There are initiatives that are currently in the pipeline to boost non-oil revenue collection. Lagos, the model state, recently announced plans to extend its tax remittance to include domestic workers and artisans. The Lagos State Internal Revenue Service is currently working on how to engage the informal sector to ensure voluntary compliance,” it said.

    Meanwhile, the International Monetary Fund (IMF) at the weekend cut its growth forecast for Nigeria as the economy faces “substantial challenges” from low crude prices.

    In its yearly review of Nigeria’s economic situation by the Executive Board of the International Monetary Fund (IMF), concluded the Article IV Consultation with Nigeria, the Fund said gross domestic product growth would slow to 2.3 per cent in 2016 from an estimated 2.7 per cent in 2015. In February, after IMF officials visited the country, the Fund had forecast 3.2 per cent growth for Nigeria in 2016.

    They urged a gradual increase in the Value Added Tax (VAT) rate, further improvements in revenue administration, and a broadening of the tax base.

    Discussions between Nigeria and the World Bank are continuing on a possible loan or credit facility that is tied to policy reforms in the West African oil exporter, a spokesman for the Washington-based multilateral lender said.

  • FAAC: Fed Govt, states, LGAs share N345.095b in February

    FAAC: Fed Govt, states, LGAs share N345.095b in February

    The Federal Government, state governments and local government councils have shared N345.095 billion as Federal Allocation for the month of February, 2016.

    A communiqué issued by the Federation Accounts Allocation Committee (FAAC) and signed by the Accountant General of the Federation Ahmed Idris showed that the Gross Revenue of N270.499 billion received for the month of February was lower than the N290.961 billion received the previous month by N20.462 billion.

    It  indicated that oil production increased slightly between December last year and January this year despite explosions at Escravos Terminal, force majeure declared at Brass Terminal, shut-in and shut-down of pipelines at other terminals for repairs and maintenance.

    The communiqué, released through the Deputy Director (Press) of the OAGF, Mrs. K.N. Offie, however explained that “there was also revenue loss of $45.90million as a result of drop in average price of crude oil from $39.04 in December, last year to $29.02 in January, this year.

    “Also, a substantial drop in income was recorded from Oil and Gas Royalty, Companies Income Tax and import Duty.

    “ Consequently, the distributable Statutory Revenue for the month is N270.499billion. The sum of N6.330 billion was refunded by NNPC (NIgerian National Corporation) to the Federal Government. There is exchange gain of N3.485 billion which was included in the amount for distribution. The value added tax VAT realised N64.781 billion was also included for distribution.

    “Based on the foregoing, the total revenue distributable for the current month inclusive of VAT is N345. 095 billion.

    “The details of the statutory revenue distributed for the month of February  is as follows:  Federal Government received N127.200 billion (52.68 per cent); states received N64. 518 billion (26.72 per cent); local government councils received N49.740 billion (20.60 per cent); while the oil producing states received N22.780 billion as 13 per cent derivation revenue.

    “Furthermore, for the month of February, 2016, the gross revenue available from the Value Added Tax (VAT) was N64.781 billion as against N69.719 billion distributed in the preceding month, resulting in a decrease of N4.938 billion.

    “The breakdown of the Value Added Tax (VAT) distribution for the month is as follows: Federal Government received N9.329 billion (15 per cent); states secured N31.095 billion (50 per cent) while the Local Government Councils got N21.767 billion (35%).”

  • FAAC shares N387.7b among federal, states, local govts

    FAAC shares N387.7b among federal, states, local govts

    The three tiers of government yesterday shared N387.7 billion for the month of December last year at the end the monthly Federation Accounts Allocation Committee (FAAC) meeting in Abuja.

    The amount shared represents an increase of N17.88 billion more than the N369.8 billion shared for the month of November.

    Addressing reporters at the end of the meeting, Permanent Secretary, Federal Ministry of Finance, Alhaji Mahmoud Isa-Dutse said the money was distributed from  statutory allocation-N315.01 billion; Value Added Tax-N62.07 billion; exchange gain-N4.35 billion; and refund made by the Nigeria National Petroleum Corporation (NNPC)for debt owed the Federation Account-N6.33 billion.

    From the statutory allocation, the Federal Government pocketed N147.56 billion after deducting the cost of collection, states received N74.84 billion and local governments went away with N57.7 billion.

    From VAT, the Federal Government got N8.93 billion representing 15 per cent of the total, states N29.79 billion or 50 per cent and local governments-N20.85 billion representing 35 per cent.

  • FAAC calls for review of laws, price regime in gas sector

    FAAC calls for review of laws, price regime in gas sector

    The Federal Account Allocation Committee (FAAC) has called for the speedy review of laws, fiscal regime, licenses and price regime of petroleum products in the country.

    The committee in a communiqué at the end of its National Seminar held in Benin said that a quick passage of the Petroleum Industry Bill (PIB) would fast track the holistic implementation of the Gas Master Plan.

    It also asked government to strive to create a balance between export of gas and the usage in the domestic market by encouraging local gas consumption as a stimulus for development of our economy.

    It also advised government to expedite the power transmission project to enable the power plants evacuate the power so that stranded gas could be utilized.

    Government, it stressed, should deliver the required infrastructure to link offshore gas to existing/ planned facility while synergies between operators need to be driven by the regulators to deliver stranded gas.