As the Nigerian economy approaches the much talked about recession, revenue allocation to federal, states and local governments dropped by 6.09 per cent as the three tiers of government shared a total of N281.5 billion for the April.
Minister of Finance, Kemi Adeosun, said at the end of the Federation Accounts Allocation Committee (FAAC) meeting on Wednesday in Abuja that net allocation for the month was lower than the N299.75 billion received in March by N18.25 billion.
The minister attributed the variance between the allocation and previous month’s to the decline in gross statutory revenue, particularly from oil proceeds during the period.
“Monies that have just been shared were sales undertaken when the oil price declined to as low as $28 per barrel before recovering to the present level. This is the lowest oil price in recent history,” she said.
Details of the allocation for the month showed that gross statutory revenue was N213.82 billion, which was lower than N232.62 billion received in the previous month.
Although oil production increased slightly between December 2015 and January 2016, the recent attacks on oil facilities in the Niger Delta, especially explosions at Escravos Terminal has worsened the situation, resulting in a force majeure being declared at Brass Terminal
The development had resulted in the shut-in and shut down of pipelines at other terminals for repairs and maintenance.
According to her, there was revenue loss of about $45.9 million as a result of a drop in average price of crude oil from $39.04 in December, 2015 to $29.02 in January 2016, while value added tax (VAT) realized for the month was N65.26 billion.
The minister said a marginal drop in income was recorded from oil and gas royalty and import duty, while about N6.33 billion was received as refund by the NNPC to the federation account.
Adeosun added that about N2.42 billion was proposed for distribution as exchange gain, while another N1.58 billion was realised as excess bank charges recovered, which was due to the federation account.
Details of the revenue distribution showed that the federal received N101.22 billion revenue, in addition to N9.4 billion as VAT, states were allocated N51.34 billion and N31.33 billion from VAT, while local governments got N39.58 billion allocation and N21.93 billion from VAT.
The 13 per cent oil derivation revenue to oil producing states was N15.75 billion, while the balance in the excess crude oil account for the month stood at $2.261 billion.
