The Federal, States and Local Governments are sharing N70 billion more money than they would have gotten in July due to the decision of the Central Bank of Nigeria (CBN) to float the naira. Before the float, the federation revenues were shared based on an exchange rate f N199 to the US$.
Though it is not clear what exchange rate is currently being used by the government to share revenues, the federal ministry of finance disclosed 26 August that the government made additional revenues of N70 billion from the weaker exchange rate of the naira. This is because Nigeria earns a good chunk of its revenues in dollars but spends in naira. So the dollar earnings is converted by the CBN to naira and given to the government to spend while the CBN keeps the dollar earnings as external reserves which is used to pay for imports.
According to a statement from the Office of the Accountant General of the Federation a total of N493.828billion was shared as Federal Allocation for the month of July 2016 by the Federal Government, State governments and Local Government Councils.
According to the figures released by Office of the Accountant General of the Federation, the gross statutory revenue including solid minerals is N275.102 while the net allocation is N258.151billion. The gross value added tax is N66.987 billion and the total distributable revenue is N335.759 billion.
The shared amount comprised the Month’s Statutory revenue of N258.151 billion, Value Added Tax of N66.987 billion, Exchange gain of N70.037 billion, Exchange Gain differential claim of N36.494 billion for the month of May 2016 , additional distribution of N50.165 billion from excess PPT and N1.373 billion as excess bank charges recovered from 2008 to 2012. There was also a N6.330 billion refund to the Federal Government by Nigerian National Petroleum Corporation (NNPC).
Consequently, from statutory revenue, Federal Government received N129.212 billion (52.68%); States received N65.538 billion (26.72%); Local Government Councils received N50.527 billion (20.60%); while the Oil Producing States received N12.874 billion as 13% derivation revenue.
Furthermore, from the Revenue available from the Value Added Tax (VAT), Federal Government received N9.646 billion (15%); States received N32.154 billion (50%) while the Local Government Councils received N22.508 billion (35%) and less 4%cost of collection to FIRS. Also the N50.165 billion from the Excess Petroleum Profits Tax is to be shared among the three tiers of Government according to the revenue allocation formula.
The Communique from the FAAC sub-technical committee also explained that there was a decrease in the Volume of Crude oil export by 2.8 million barrels in April 2016 due to a subsisting Force Majeure at Forcadose Terminal. There was also a shut-in and shut-down of pipelines due to the activities of vandals as well as for maintenance which impacted negatively on production.
