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Friday, August 26, 2016

July 2016 Federal Allocation Stands At N444.6b

Nigeria's Minister of Finance

Allocation  to the three tiers of government after the monthly Federation Account Allocation Committee (FAAC) meeting yesterday dropped to N443.663 billion. Last month’s allocation of   N559.032 billion triggered jubilation and predictions from some quarters that the July disbursements will may be higher.

Addressing reporters at the end of the meeting, the Permanent Secretary of the Finance Ministry, Dr 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 disclosed that Lagos state will not start benefiting from the 13 per cent derivation arrangements 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 making up the amount shared for the was the N1.373 billion recovered from banks as excess charges from 2008 to 2012.

Isa-Dutse stated that the committee 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.”

Another extra accrual into the federation account which was shared yesterday was the N36.494 billion exchange gain arrears for May 2016. The exchange gain arrears “arose from the June FAAC because the Central Bank of Nigeria (CBN) used the fixed exchange rate to calculated accruals into the account. However, the National Economic Council (NEC) directed the CBN to use the flexible exchange rate” to calculate accruals into the account which resulted in the additional N36.494 billion that came into the pot.

In 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.

To read our report on June 2016 Federal allocation, please click here

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