FG, states get January ‘pay cut’ of N188bn

The drop in crude oil prices in the international market has taken its toll on the federation account as statutory allocation to the three tiers of government witnessed a decline of N188.8bn from the budgeted estimates of N688.94bn to N500.13bn in January.
The N500.13bn, which is contained in the communiqué issued at the end of this month’s Federation Accounts Allocation Committee meeting, also represents a decline of N80.25bn over the N580.38bn shared by the three tiers of government in the month of December.
The N500.13bn that was shared was made up of statutory allocation of N416.09bn, Value Added Tax N63.94bn, exchange gain N8.57bn and refund of N6.33bn made by Nigerian National Petroleum Corporation to the federation account to settle its indebtedness.
The communiqué attributed the decline in gross allocation to drop in crude oil prices from $77.53m in November to $52.34m in December.
It also stated that a 33 per cent decrease in export volume between November and December 2014 translated into a loss of $159.88.
The report said, “The gross revenue of N416.09bn received for the month was lower than the N490.03bn received in the previous month by N73.93bn.
“There was substantial loss of revenue due to further drop in crude oil prices from &77.53m in November to $52.34m in December 2014.
“Also, a 33 per cent decrease in export volume between November and December 2014 translated to a loss of $159.88m.
“The shutdown and shut-in trunks and pipelines at various terminals continued to impact negatively in the revenue performance.Also, non-oil revenues performed below the 2014 budgetary provisions.”
The communique also stated that N6.33bn was refunded by the Nigerian National Petroleum Corporation to the Federal Government being part settlement of the corporation’s indebtedness to the federation account.
From the statutory allocation, the communique stated that that the Federal Government received N194.34bn, representing 52.68 per cent while the states and local government got N98.57bn and N75.99bn respectively.
Similarly, the sum of N39.45bn was shared to the oil producing states based on the 13 per cent derivation principle.
For Valued Added Tax distribution, the communique stated that the Federal Government received N9.20bn or 15 per cent while the states and local governments got N30.67bn and N21.48bn respectively.
Addressing journalists shortly after the meeting, which began at 7pm and ended at about 9.30pm on Tuesday night, the Minister of State for Finance, Amb Bashir Yuguda, put the excess crude account at about $2bn.
On the forensic audit report and the amount to be refunded, he said, “I have engaged the minister of Petroleum and we have discussed the time frame on the refund of that amount.”

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