President Muhammadu Buhari has directed that a new template for revenue remittances into the Federation Account be generated.
The objective is to stop future embarrassment arising from remittances into the account at meetings of the Federation Account Allocation Committee (FAAC).
The new template is to be jointly agreed upon by the Ministry of Finance, Office of the Accountant-General of the Federation, Nigerian National Petroleum Corporation (NNPC) and the Revenue Mobilization Allocation and Fiscal Commission (RMAFC).
Addressing journalists at the end of a FAAC meeting where a total of N821.863bn, one of the highest sums in recent time, was shared by the three tiers of government in recent times, Finance Minister Kemi Adeosun said the president directed that โprior to the FAAC, there must be a pre-meeting between the Ministry of Finance and the NNPC to go through the figures that are being presented and to agree on those figures before they are brought to the FAAC.โ
She added: โThis reform is very fundamental and will improve the reporting of the FAAC. The template we are currently using has really not been revised in a very long time. Many of the questions or conflicts are because the information has not necessarily been presented in a transparent and user-friendly manner. We believe that this intervention by Mr President is very far-reaching and the commissioners were very grateful for that intervention and we are now working together to improve the Federation Account reporting.โ
Asked how soon the template will come into effect,the minister said: โThe new template is being worked on and from next month, we should have some agreement as to what that template would look like and we will then circulate it to stakeholders and then weโll begin to use it.โ
She said the FAAC does not,for now, โhave a timeline because there is a lot of work to be done. We have started and we recognise that itโs really a fundamental exercise that needs to be done. I would rather not give you a date but to give you an assurance that the new template would be user-friendly, a lot more granular, a lot more specific and therefore a lot more accurate in terms of controlling the contribution to the Federation Account.โ
On the reason for the huge increase in the June revenue shared in July, Adeosun attributed it largely to the Federal Inland Revenue Service (FIRSโs) non-oil remittance which moved to N232.72 billion from N104. 65 billion. โThatโs really the large swing this month. Most of the other metrics were up but not as much.โ
Adeosun who was happy at the peaceful turn of events noted that โthis intervention by Mr President is very far-reaching and the commissioners were very grateful for that intervention and we are now working together to improve the Federation Account reporting.โ
On savings to the Excess Crude Account (ECA) as recommended by the Monetary Policy Committee (MPC), the Finance Minister revealed that the account has grown to $2.247billion.
According to her, โwe have put in N100 billion in the Excess Crude Account this month which is roughly close to $300 million. We have saved consistently and we do need to save for the rainy day.
We are growing and our growth is back again and we do need to build our fiscal buffers and we are committed to doing it. We are continuing to drive our revenue and we are doing it as much as possible and that is the commitment this government has. We will rebuild those buffers to have savings for any unforeseen downturn that may occur.โ
Before taking questions from journalists, Adeosun read out the communique detailing the sharing of N821.863 billion among the three tiers of government and other beneficiaries.
According to her, the shared amount comprised the Monthโs Statutory distributable revenue of N694.672 billion, the Value Added Tax (VAT) of N85.342billion and the Excess Gain from the Forex Equalization Account of N41.848 billion making up the sum of N821.863 billion.
Accordingly, from Net Statutory Allocation, the Federal Government received N283.540 billion representing (52.68%); states received N143.815 billion (26.72%); local government councils received N110.876 billion representing (20.60%); while the oil producing states received N37.408 billion as 13% derivation revenue.
Meanwhile, the FIRS, Nigeria Custom Service and DPR received the sum of N22.446 billion as their cost of collection and FIRS refund. There was also N100 billion transferred to the Excess Crude Account.
Furthermore, from the revenue available from the Net Value Added Tax (VAT), Federal Government received N12.289 billion (15%); states received N40.965 billion (50%) while the local government councils received N28.675 billion (35%).
The communique explained that there was an increase in the average price of crude oil from $65.98 to $667.93 per barrel and an increase in export sales of 1.42 million barrels which resulted in increased revenue from export sales of $101.64 billion.
It further stated that other issues which negatively affected the crude oil production were shut-ins and shut-downs of pipelines for maintenance and for repairs.
