- FAAC distributes N1.3trn to FG, States, LGs
The Federal Government has officially announced the termination of fuel and foreign exchange subsidies, marking the end of a long-debated policy.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this declaration during the presentation of the Nigeria Development Update by the World Bank in Abuja on Thursday.
Edun revealed that these subsidies had drained the country’s economy, costing over N10 trillion, which amounts to five percent of Nigeria’s Gross Domestic Product.
“Fuel and FX subsidies are extinguished,” Edun said, as he emphasized the financial strain these policies had imposed on the nation.
The minister also announced a new government plan aimed at addressing unemployment, with a focus on housing finance.
This initiative, he explained, would feature a mortgage scheme offering near single-digit interest rates.
The government expects this approach to boost construction activities and generate significant job creation.
“The plan will be anchored around mortgage and housing financing,” Edun stated.
At the same event, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, explained the rationale behind the recent half-percent interest rate hike.
He disclosed that the Monetary Policy Committee had anticipated the latest inflation trends, which drove their decision to increase the rate.
“Policies and decisions will be based on evidence and data going forward,” Cardoso affirmed, underscoring the CBN’s commitment to data-driven policy formulation.
Bauchi State Governor, Bala Mohammed, also participated in the discussion. He expressed concern over the insufficient funds allocated to state governments through the Federation Account Allocation Committee.
“The money coming from FAAC every month is not enough for state governments to provide infrastructure,” he lamented.
Mohammed criticized federal policies, noting that they had reduced the purchasing power of Nigerians.
“These policies are not working,” he declared, pointing to the hardship being felt by the masses.
Regarding the implementation of the new N70, 000 minimum wage, Governor Mohammed acknowledged the challenges states face.
“Some states can afford N70, 000, some cannot. We in Bauchi State are paying the old minimum wage religiously. We’re looking at paying the new minimum wage as soon as possible,” he added.
He voiced concerns that while states are loyal to the wage law, the ability to fund essential infrastructure after meeting the new wage obligation remains a serious challenge.
“We are about to be lynched,” he said, noting the pressure on state governments.
From the private sector, Amal Hassan, CEO of Outsource Global Limited, urged the Federal Government to create a more attractive environment for investors.
“The government must de-risk the economy to make it easy for investors to come in,” she said, adding that despite Nigeria’s negative global image, the country’s talent pool continues to attract attention from international businesses.
World Bank Senior Vice President and Chief Economist, Indermit Gill, wrapped up the discussion by calling on Nigeria’s economic units, Monetary, Fiscal, and other units, to collaborate more effectively.
He emphasised the need for unified efforts to drive economic reforms and growth.
FAAC distributes N1.3trn to FG, states, LGs
Meanwhile, the Federation Account Allocation Committee has shared a total of N1.298 trillion among the Federal Government, State Governments, and Local Government Councils from the September 2024 Federation Account revenues.
The Director of Press and Public Relations at the Office of the Accountant-General of the Federation, Bawa Mokwa, explained in a statement that the total distributable revenue included N124.716 billion from statutory sources and N543.518 billion from Value Added Tax collections.
Other sources contributing to the shared revenue were the Electronic Money Transfer Levy (EMTL) at N18.445 billion, Exchange Difference revenue of N462.191 billion, and an Augmentation of N150 billion.
For September 2024, total available revenue amounted to N2.258 trillion. Deductions for the cost of collection stood at N80.993 billion, while transfers, interventions, and refunds accounted for N878.946 billion.
The gross statutory revenue for September 2024 was N1.043 trillion, which was N177.426 billion, lower than the N1.221 trillion received in August 2024. However, gross VAT revenue increased to N583.675 billion in September 2024, up by N10.334 billion from August’s N573.341 billion.
Of the N1.298 trillion distributed, the Federal Government received N424.867 billion, State Governments received N453.724 billion, and Local Government Councils received N329.864 billion. A further N90.415 billion, representing 13% of mineral revenue, was allocated to oil-producing states as derivation revenue.
From the N124.716 billion in distributable statutory revenue, the Federal Government received N43.037 billion, State Governments N21.829 billion, and Local Government Councils N16.829 billion. Oil-producing states received N43.021 billion as derivation revenue.
In terms of the N543.518 billion VAT revenue, the Federal Government was allocated N81.528 billion, State Governments N271.759 billion, and Local Government Councils N190.231 billion.
Additionally, the N18.445 billion from the EMTL was shared with the Federal Government receiving N2.767 billion, State Governments N9.222 billion, and Local Governments N6.456 billion.
From the N462.191 billion Exchange Difference revenue, the Federal Government received N218.515 billion, State Governments N110.834 billion, Local Governments N85.448 billion, and oil-producing states N47.394 billion as derivation.
Finally, from the N150 billion Augmentations, the Federal Government was allocated N79.020 billion, State Governments N40.080 billion, and Local Government Councils N30.900 billion.
