September 2024, The Federal Government, alongside state and local government councils, distributed a total of N1.203 trillion in revenue collected during August 2024. This figure marks an 11.4% drop from the N1.358 trillion allocated for July’s revenue, as confirmed in a recent meeting of the Federation Accounts Allocation Committee (FAAC) held in Abuja.
Overview of Revenue Sources.
According to FAAC’s official statement, the total revenue pool for August was N2.278 trillion. After deducting N81.975 billion for collection costs and setting aside N992.617 billion for transfers and refunds, the remaining N1.203 trillion was made available for distribution.
This distributable revenue comprises various components, including a significant increase in statutory revenue, which rose by 15.5% from N161.593 billion in July to N186.636 billion in August. Conversely, Value Added Tax (VAT) revenue fell by 8.3%, dropping from N582.307 billion in July to N533.895 billion in August. The Electronic Money Transfer Levy (EMTL) also decreased by 20.2%, with N15.017 billion shared in August compared to N18.818 billion the previous month. Additionally, Exchange Difference revenue declined by 19.5%, from N581.710 billion in July to N468.245 billion in August.
Distribution of Funds
The allocation breakdown reveals that the Federal Government received N374.925 billion, down 13% from N431.079 billion in July. States received N422.861 billion, representing a 10.7% decline from the previous month’s N473.477 billion, while Local Government Councils obtained N306.533 billion, an 11% decrease from N343.703 billion in July.
Mineral-producing states shared N99.474 billion in derivation revenue for August, marking a 9.4% decrease from N109.816 billion in July. In terms of statutory revenue, the Federal Government received N71.624 billion, states got N36.329 billion, and local councils received N28.008 billion, with the remaining N50.675 billion allocated as mineral derivation revenue.
From the VAT collection of N533.895 billion, the Federal Government’s share was N80.084 billion, while states received N266.948 billion, and local councils got N186.863 billion. The distribution of the EMTL revenue of N15.017 billion was N2.252 billion for the Federal Government, N7.509 billion for states, and N5.256 billion for local councils.
The Exchange Difference revenue, totaling N468.245 billion, was shared with the Federal Government receiving N220.964 billion, states getting N112.076 billion, and local councils obtaining N86.406 billion, alongside an additional N48.799 billion for mineral derivation.
Economic Contex
The report highlights a general decline in key revenue streams for August 2024, including Oil and Gas Royalty, Petroleum Profit Tax, VAT, Import and Excise Duties, and Companies Income Tax. The balance in the Excess Crude Account stood at $473,754.57 at the month’s end, indicating ongoing challenges in revenue generation for the government.
This allocation scenario reflects a tightening fiscal environment, prompting a need for strategic financial planning across all levels of government.
