•As FRC’s support for NASS revenue hearings yield N1.84trn
From Adanna Nnamani, Abuja
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the three tiers of government shared N10.143 trillion as disbursements from the Federation Account Allocation Committee (FAAC) in 2023.
It was N8.2 trillion the previous year and represents an increase of N1.934 trillion or 23.56 per cent.
This is as the Fiscal Responsibility Commission’s (FRC) provision of technical support to the revenue hearings conducted by the National Assembly, increased independent revenues by about N1.84 trillion.
The Executive Chairman of the Commission, Mr Victor Muruako, stated this on Tuesday in Abuja at a one-day policy dialogue
The dialogue was on the implementation of the presidential directive of 50 per cent automatic deduction from the Internally Generated Revenue (IGR) of Government-Owned Enterprises (GOEs).
On NEITI’s report, the increase sprang from increased remittances into the federation account due to the removal of petrol subsidy and the floating of the exchange rate by the new administration of President Bola Tinubu.
NEITI made the disclosures in its latest report released on Tuesday.
NEITI earlier predicted that account revenue and allocations would increase significantly due to the two major policy changes by President Bola Tinubu – the removal of petrol subsidy and the floating of the naira exchange rate.
“Of the N10.143 trillion, the Federal government received N3.99 trillion while the state government received N3.59 trillion. The 774 local government councils collected 2.56 trillion. The oil producing states received an additional N763.25 billion as derivation revenue.
“The total distributable FAAC allocation in the year 2023 represents a 23.56 per cent increase compared to the 2022 allocation which was N8.209 trillion without the 13 per cent derivation. Consequently, the federal, states and local governments’ shares increased by 16.79 per cent, 29.99 per cent and 26.22 per cent respectively. The major revenue generating agencies that remit funds to the Federation Account are the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS).
“The different streams of revenue contributed and remitted to the Federation Account by these agencies in 2023 include oil and gas royalties, petroleum profit tax, company income tax, value added tax and import & excise duties’’, it explained.
The report also found out that revenue remittance to the federation account fluctuates significantly from month to month due to corresponding fluctuations in oil and gas revenue.
The report also noted that revenue from the solid minerals sector is very negligible, and reflects the underperformance of the sector.
The report recommended that the National Assembly and the Executive should adopt more conservative estimates for crude oil prices and output to enhance budgetary performance, reduce budget deficits and borrowing and strengthen fiscal stabilization.
“In the long run, the government should aim to reduce oil revenue dependency while state governments should improve their internal revenue generation capacity.
“Government should review and improve the solid mineral sector policy and regulatory framework and implement reforms to grow the sector’s productivity.
The Federation Accounts Allocation Committee stakeholders should sustain and strengthen transparency in the process of revenue remittances, disbursements and reporting.