Federal Government, States and LGs Shared N2.19tn from FAAC in May

In May 2024, the Federation Account Allocation Committee (FAAC) disbursed N2.19 trillion to Nigeria’s three tiers of government. This FAAC disbursement comprised N390.41 billion for the Federal Government, N403.403 billion for state governments, and N293.816 billion for local governments. Oil-producing states were allocated an additional N120.450 billion as 13% derivation revenue.

The Federal Government set aside N80.51 billion from the FAAC for collection costs. The total revenue included N1.233 trillion from statutory revenue. Value Added Tax (VAT) yielded N500.92 billion, marking a decrease of N48.778 billion from the previous month. Following deductions for collection costs and transfers, N466.46 billion in VAT revenue was divided among the three tiers of government, with the Federal Government receiving N390.41 billion, states receiving N493.40 billion, and local governments receiving N293.82 billion.

The rise in FAAC revenue shared among the three tiers of government was attributed to an increase in oil and gas royalties, companies’ income tax (CIT), excise duties, petroleum profit tax (PPT), and customs external tariffs. This revenue surge offers an opportunity to enhance public services such as education and healthcare, reduce public debt, and drive economic growth through targeted investments.

To fully leverage these advantages from the rise in FAAC, the government must prioritize critical sectors like agriculture and infrastructure development, ensure transparent expenditure, prevent fund misappropriation, and thereby boost economic activities while alleviating economic challenges.