Nigeria’s Federation Account Sees Record Revenue for December 2023
The Federation Account Allocation Committee (FAAC) has announced a historic revenue of N1.674 trillion for Nigeria’s federation account in December 2023. This substantial increase in revenue serves as a clear indication of the nation’s economic stability and growth potential.
Of the total revenue, N1.127 trillion was distributed among the Federal Government, state governments, local government councils, and other entities benefiting from the federation account. This surplus of over N500 billion at the beginning of the fiscal year underscores Nigeria’s commitment to financial prudence and saving for the future.
The breakdown of the revenue revealed significant increases in various tax sources including Companies Income Tax (CIT), Excise Duty, Petroleum Profit Tax (PPT), Value Added Tax (VAT), and Electronic Money Transfer Levy (EMTL). However, there was a decrease in Oil and Gas Royalties, and a slight decline in Import Duty and CET Levies.
Despite the stagnant Excess Crude Account (ECA) at $473,754.57, the surplus in the federation account serves as a buffer for any unforeseen economic challenges in the future.
The gross statutory revenue for December 2023 was slightly lower than the previous month, but the revenue figures remained robust, reflecting Nigeria’s steady economic growth. There was a notable increase in VAT revenue, attributed to improved economic activities and increased consumer spending during the festive season.
The distribution of revenue saw the Federal Government receiving N383.872 billion, state governments receiving N396.693 billion, and local government councils receiving N288.928 billion. Additionally, N57.915 billion, representing 13 percent of mineral revenue, was shared among the benefiting states as derivation revenue.
From the distributable statutory revenue, the Federal Government received N173.729 billion, state governments received N88.118 billion, and local government councils received N67.935 billion. Furthermore, N33.406 billion, representing 13 percent of mineral revenue, was shared as derivation revenue among the benefiting states.
In terms of VAT revenue, the Federal Government received N68.793 billion, state governments received N229.311 billion, and local government councils received N160.518 billion.
The allocation of Electronic Money Transfer Levy (EMTL) amounted to N17.855 billion, with the Federal Government receiving N2.678 billion, state governments receiving N8.928 billion, and local government councils receiving N6.249 billion.
Despite the remarkable revenue gains, the stagnant Excess Crude Account raises concerns about the need for the strategic investment of surplus funds into critical sectors. Additionally, the slight decline in statutory revenue and continued dependence on oil and gas require further attention.
The exceptional revenue recorded in December 2023 presents an opportunity for strategic investment in development projects and infrastructure. The nation’s economic progress and stability are further ensured by the allocation of funds to the three tiers of government, promoting inclusive growth and prosperity.
In conclusion, Nigeria’s federation account has started the new year with a remarkable surplus, setting the stage for economic progress and financial stability. The increase in various tax revenue sources signifies a thriving economy, and the strategic allocation of funds ensures the benefits are spread across the nation.
