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FG and Stakeholders Divide N2.84 Trillion in FAAC Allocation

FG, States, and LGs Share N2.84 Trillion in FAAC Allocation for the First Four Months of 2023

Nigeria’s Federal Government (FG), along with the 36 states and 774 local governments (LGs), received a total of N2.84 trillion as statutory allocation from the Federation Account Allocation Committee (FAAC) during the period of January to April in the year 2023. This amount reflects a year-on-year increase of 7.98 percent compared to the N2.63 trillion shared in the corresponding period of 2022 (4m’22). However, there was a monthly downward trend in allocations throughout the four-month period.

Data extracted from the monthly FAAC communique for the period revealed that in January, the allocation amounted to N750.2 billion. In February, allocations dropped by 3.67 percent to N722.6 billion, and further decreased by 1.1 percent to N714.6 billion in March. The downward trend continued in April, with allocations falling by 8.2 percent to N655.9 billion.

Within this period, the FG received a total of N1.07 trillion, marking a year-on-year increase of 5.9 percent from the N1.01 trillion received in the same period of 2022. The states received N931.85 billion, reflecting a 12 percent rise from N828.8 billion, while the LGs received N685.88 billion, indicating an 11.9 percent increase from N612.5 billion in 2022.

Additionally, allocations from Value Added Tax (VAT) experienced a year-on-year surge of 19.5 percent, reaching N880.16 billion in 2023 compared to N736.06 billion in 2022.

However, the 13 percent derivation fund allocated to oil-producing states witnessed a year-on-year decline of 32 percent, amounting to N132.7 billion in 2023 compared to N196.07 billion in 2022. This decrease reflects the decline in crude oil production in March and April 2023. Crude oil production stood at 1.25 million barrels in January 2023, increased by four percent to 1.3 million barrels in February, and declined by three percent to 1.26 million barrels in March. The downward trend continued in April with a 21.5 percent decrease to 998,602 barrels.

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Despite the fluctuations in monthly allocations, the total amount shared during the four-month period indicates an overall increase compared to the previous year. The FAAC allocation plays a crucial role in the distribution of funds among the various tiers of government in Nigeria, enabling them to meet their financial obligations and carry out developmental projects.