FG, states, LGs share N1.298trn FAAC revenue in September

• The three tiers of government shared a total of N1.298 trillion as FAAC revenue in September
• The revenue was generated through different sources including VAT, EMTL, Exchange Difference and Company Income Tax, among others
• The allocation brings to mind the Supreme Court ruling in July guaranteeing financial autonomy for local government councils

The Federal Government, states and the Local Government Councils (LGCs) have shared a total of N1.298 trillion as Federation Accounts Allocation Committee (FAAC) revenue for September 2024.

The revenue distribution was contained in a communiqué issued at the end of the October 2024 meeting of FAAC, in Abuja on Thursday, October 17.

The distributable total revenue of N1.298 trillion comprised distributable statutory revenue of N124.716 billion, distributable Value Added Tax (VAT) revenue of N543.518 billion, Electronic Money Transfer Levy (EMTL) revenue of N18.445 billion, exchange difference revenue of N462.191 billion and augmentation of N150.000 billion.

The communiqué indicated that a total revenue of N2.258 trillion was available in September 2024, out of which N80.993 billion was deducted for the cost of collection, while total transfers, interventions and refunds were N878.946 billion.

Gross statutory revenue of N1.043 trillion was received for September 2024, which was N177.426 billion lower than the N1.221 trillion received in August 2024.  

A statement by Bawa Mokwa, Director (Press and Public Relations) in the Office of the Accountant General of the Federation (OAGF), noted that the gross revenue of N583.675 billion was available from the VAT in September 2024, higher than the N573.341 billion available in August 2024 by N10.334 billion.   

How the revenue was distributed among the three tiers of government

According to the communiqué, from the total distributable revenue of N1.298 trillion, the Federal Government received N424.867 billion, the 36 state governments received a total sum of N453.724 billion, the LGCs received a total sum of N329.864 billion and N90.415 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue. 

Of the N124.716 billion distributable statutory revenue, the communiqué stated that the Federal Government received N43.037 billion, state governments received N21.829 billion, LGCs received N16.829 billion and N43.021 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue. 

VAT, EMTL and others were shared too

The communiqué also stated that from the N543.518 billion distributable VAT revenue, the Federal Government received N81.528 billion, state governments received N271.759 billion and the LGCs received N190.231 billion. 

Also, of the N18.445 billion Electronic Money Transfer Levy (EMTL), the Federal Government received a total sum of N2.767 billion, state governments received N9.222 billion and the LGCs received N6.456 billion.

From the N462.191 billion exchange difference revenue, the Federal Government received N218.515 billion, state governments received N110.834 billion, LGCs received N85.448 billion, while the sum of N47.394 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue, according to the communiqué. 

From augmentation of N150.00 billion, the Federal Government received N79.020 billion, state governments received N40.080 billion and LGCs received N30.900 billion.

The communiqué also noted that in September 2024, Oil and Gas Royalty, Excise Duty, EMTL and CET levies increased considerably while VAT and Import Duty increased marginally. Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and others recorded significant decreases. 

FG sought financial autonomy for LGs

It will be recalled that the Supreme Court of Nigeria, on Thursday, July 12, ruled that the 774 Local Governments Councils (LGs) be allowed to receive and manage their funds themselves.

In a lead judgement delivered by Justice Emmanuel Agim, the seven-man panel unanimously said it is unconstitutional for state governors to hold funds allocated for local government administrations.

The court ruling followed a suit instituted by the Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, on behalf of the Federal Government on May 26, seeking a better guarantee of the independence of local governments and for all 774 LGCs to be granted full autonomy and direct funding from the federation account as the third tier of government.

In the 27-ground suit, the AGF asked the Supreme Court to issue an order prohibiting state governors from unilateral, arbitrary and unlawful dissolution of democratically elected local government leaders.

Ruling on the case, the Supreme Court noted that since paying local governments through states has not worked, their allocation from the federation account should henceforth be paid directly to them.

The Supreme Court also dismissed the counterclaim filed by the 36 state governments, which argued that the court lacked the jurisdiction to hear the matter.

In the objections filed through the states’ attorney generals, they also argued that the Attorney General of the Federation (AGF) lacked the locus standi to institute the financial autonomy suit on behalf of the local governments.

Why is FAAC revenue not reflective of development in states? Nigerians react to N2.5trn state allocation in H1 2024

Meanwhile, TheRadar reported that the distribution of a total of N1.345 trillion as FAAC revenue accruing to the federal, state and Local Governments in June 2024 brought the total FAAC revenue received by states in the first half of 2024 to N2.597 trillion.

However, Nigerians are wondering why the FAAC revenue is not commensurate to the level of development in states.