Between January and October 2021, over N6.747 trillion accrued into the federation account as revenue from Statutory Revenue; Value Added Tax (VAT); Exchange Gain; Excess Bank Charges Recovered and Non-Oil revenue.
Being a zero sum account, all the money (revenue) into the federation account are disbursed at the end of every month ready for new accruals in the new month.
From the over N6.7 trillion shared so far in the year, the federal government has received over N2.047 trillion as statutory allocation from the federation account, the 36 state governments have pocketed N1.038 trillion, local governments have had N801.46 billion credited to their accounts and a princely N334.276 billion have been paid to mineral producing states as 13 percent derivation, The Nation reports.
Already over N1.564 trillion has accrued into the account and shared among the three tiers of government. This figure is less what has been paid to the Federal Inland Revenue Service (FIRS) as cost of collection.
So far the federal government has received over N234.866 billion as VAT proceeds, state governments over N780.908 billion and local governments over N548.849 billion.
Accruals into the federation account is what the three tiers of government use to run their governmens particularly their civil service especially at the state and local government levels.
The accruals into the federation account have suffered significant decline following the decision of the Nigeria National Petroleum Corporation (NNPC) to divert proceeds that should have gone into the federation account to servicing subsidy payment in its work to “ensure energy security” for the country.
The NNPC deducted N170.4 billion in August, N114.3 billion in July; and about N126 billion in June from its FAAC remittance.
According to the NNPC, “out of the value shortfall of N143,286,281,752.62, the sum of N103,286,281,752.62 was applied to the Gross Domestic receipts before arriving at the net receipt of N67.28billion in order to make funds available for JV cost recovery to sustain the existing production level”.
The NNPC noted: “The July, 2021 value shortfall of N175,317,701,294.80 and outstanding balance of N40,000,000,000 will be deductible from the August, 2021 proceeds due for sharing at the September, 2021 FAAC meeting.”