…FG says massive investment returns Nigeria to top position in Africa
23 October 2016, Sweetcrude, Abuja – The revenue allocation to federal, states and local governments for the month of September dropped by about N90.27 billion, as they shared a total of N420 billion for the month.
About N510.2 billion was shared at the Federation Account Allocation Committee (FAAC) meeting in August.
The Permanent Secretary, Federal Ministry of Finance, Mr. Mahmoud Isa-Dutse, who disclosed at the end of the meeting with Commissioners of Finance and the FCT, in Abuja, blamed the situation on attacks on oil facilities by vandals in the Niger Delta and the negative impact of declining global oil prices of crude oil in the international market.
“We need to do everything possible to normalize things in the Niger Delta region,” Mr. Dutse said.
He said the total revenue available for distribution for the month was N420 billion.
This consists of earnings from statutory sources, N250.95 billion; value added tax (VAT) N64.27 billion; exchange gain, N41.4 billion; excess petroleum profit tax, N63.39 billion and Nigerian National Petroleum Corporation (NNPC) refund to the Federal Government N6.33 billion.
“The gross statutory revenue of N279.75 billion received for the month was lower than the N319.05 billion received in the previous month by N35.29billion,” Mr. Dutse said.
Dutse said the decline was also attributed to the Force Majeure declared at both the Bonny and Forcados crude oil exporting terminals as well as the shut-in of crude oil production and shut-down of pipelines for routine repairs and maintenance in the region.
Force Majeure is declared by a company when it is unable to meet agreed obligations, due to unforeseen circumstances beyond its control.
Besides, he said there were decreases in the volume of dutiable import receipts from Joint Venture Cash Call, Foreign Companies Income and Value Added Tax.
Details of the allocations showed that about N120.351 billion was disbursed as statutory share to the federal government, N61.044 billion to the state governments, while local governments received N47.062 billion. The mineral producing states got N13.729 billion.
In addition, the three tiers of government shared a total of N61.694 billion from VAT with the federal government receiving N9.254 billion; state governments, N30.847 billion and local governments, N21.593 billion.
Apart from the disbursements, the permanent secretary said the Excess crude oil revenue Account has a balance of $2.454 billion.
He was optimistic Nigeria’s potential for growth remained positive in view of the recent pronouncement by the International Monetary Fund (IMF) that the country’s economy was now larger than South Africa’s.
“This will make us a major destination for investors and it shows that Nigeria is on the path of growth,” Mr. Dutse said.
The Accountant General of the Federation, (ÀGF), Idris Ahmed, attributed Nigeria’s economy overtaking South Africa’s to the massive capital investment by the federal government.
He assured the country would soon come out of the economic recession the country was experiencing, as all indices and parameters were pointing to this.
The Edo state commissioner for finance and chairman finance commissioners forum, John Inegbedion, criticised the cost of collection usually deducted by revenue generating agencies, like the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and the Department of Petroleum Resources (DPR) were unconstitutional.
Under the current arrangement, both DPR and FIRS receive 4 per cent of their total revenue collection each as cost of collection every month, while Customs is paid 7 per cent for a similar purpose.
Mr. Inegbedion however said it was agreed politically by all stakeholders that the agencies should go ahead and receive cost of collection since the federal government was not able to fund them properly.