Despite the economic downturn that has characterised the 2020 fiscal year, LEADERSHIP findings have shown that the federation account only felt a little of the coronavirus induced bearish movement in the global economy as revenue disbursement from the federation account indicate above average performance.
A check on the monthly revenue sharing schedule of the Federation Account Allocation Committee (FAAC) showed that a total of N6,574.211 trillion was disbursed to the federal, state and local government areas of the federation as well as other statutory recipients in the first 10 months of 2020, according to official documents.
Between January and October 2020, federal government received N2,943.95 trillion from the gross statutory revenue of N6,574.211 trillion; the state governments (including the federal capital territory) received N1,788.736 trillion and the local government councils received N1,338.934 trillion. A total of N409.908 billion was given to oil producing states of the federation 13 per cent mineral revenue.
Under the current revenue sharing formula, the federal government takes 52.68 per cent, the states 26.72 per cent and the local governments, 20.60 per cent with 13 per cent derivation revenue going to the oil producing states.
The total distributable revenue for each month comprise statutory revenue, Value Added Tax (VAT), revenue from forex equalization, non-oil excess revenue and federal government intervention revenue.
A breakdown of the figures reveal that N716.30 billion was available for disbursement in January 2020 from the revenue generated in December 2019, while N647.35 billion came in to the three tiers of government in February 2020 from the revenue generated in January.
In that same respect, while FAAC disbursed the sum of N581.57bn to the three tiers of government in March, N780.93 billion and N606.20 billion were shared in April and May respectively.
A closer look at the available data showed that N547.31 billion was shared in June as July saw the sharing of N696.18 billion, while FAAC approved the disbursement of the sum of N676.41 billion to the three tiers of government in August 2020.
Out of the total revenue that was generated in August, the Committee approved the sharing of N682.06bn for the month of September of the same year, while N639.901 billion was shared among the various tiers of government.
FAAC shared N3.879 trillion to the federal, state and local governments in the first half of 2020. Disbursements in the second quarter of 2020 stood at N1.934 trillion. A breakdown of the figures for that period showed that federal government got N739.2 billion, N629.3 billion shared to state governments, and N375.4 billion to the 774 local government areas.
The COVID-19 induced lockdown in the second quarter of the year actually had some impact on the economy manifested in the available resources that were shared for the period. For instance, the revenue distribution to the federal government in the same period shrunk by 4.28 per cent lower than the N1.599 trillion it got in the first half of 2019 and 7.36 per cent lower than the N1.652 trillion it received in the first half of 2018.
N1.298 trillion was disbursed in the first half of 2020 to states. This was 2.8 per cent lower than the N1.35 trillion disbursed in the first half of 2019, and 5.6 percent lower than the N1.375 trillion disbursed in the first half of 2020”, the report stated.
For local government areas, the 2020 first half disbursements were 2.64 per cent and 3.04 per cent lower than the corresponding disbursements for 2019 and 2018 respectively.
As noted by the Nigeria Extractive Industries Transparency Initiative in its report on FAAC disbursements in the first half of 2020, the rise in revenue accrual to the federation can be attributable to the 0.55 percent decrease in Q2 2020 to a couple of factors, namely: “rebound in oil prices in the second quarter as a result of ease of lockdowns by countries across the world and the adjustment of the official exchange rate by the CBN from N307/$1 to N360/$1 in March resulting in higher naira disbursements.