The gross monthly distributions by the Federation Account Allocation Committee (FAAC) to the three tiers of government amounted to NGN990bn (USD2.2bn) in January 2023 (from December revenue). The gross payout for January represents an increase of NGN88bn or around 9% m/m from the previous month’s gross payout. Compared with the preceding month’s payout, the higher disbursement was primarily due to increases of NGN27bn and NGN30bn in statutory revenue and value-added-tax (VAT) to c.NGN708bn and c.NGN233bn respectively. In addition to the VAT and statutory revenue, the headline figure includes NGN25bn in exchange gain and electronic money transfer levies of 24bn.

We understand that the increase in statutory revenue was mostly driven by higher collections from companies’ income tax and petroleum profit tax.

The federal government’s (FG) share of revenue disbursements amounted to NGN375bn, or 4% higher relative to the previous month.

The FG’s disbursement comprises of NGN325bn in statutory revenue, NGN35bn in VAT, NGN4bn in electronic money transfer levies, and NGN12bn in exchange gains.

Allocations to the 36 states (ex-13% derivation) and local government councils recorded significant increases of NGN29bn and NGN18bn to NGN300bn and NGN222bn. The 13% derivation allocation for oil producing states grew by 38% m/m to NGN94bn.

According to the committee, the balance in the Excess Crude Account (ECA) as of January ’23 was flat at USD474,754.6.

Of the total distribution, NGN42bn was spent on collection costs. The total allocations for statutory transfers, savings and refunds amounted to NGN397bn.

Average monthly allocation for January through December ‘22 amounted to NGN758bn, compared with NGN677bn in 2021, NGN636bn in 2020 and NGN685bn in 2019.

On a cumulative basis, the total distributed revenue to the three tiers of the government between January and December increased by 12% y/y to NGN9.1trn.