The Federation Account Allocation Committee, FAAC, cash disbursements to the three tiers of government dipped by N90 billion in October, from N420 billion in September.
FBN Quest, in a report, said oil price plunge took its toll on the FAAC reserves, resulting in the drop in the allocation and the inability of many states to honour recurrent obligations, including salaries and pension liabilities, as well as capital obligations.
FBNQuest said the statutory distribution of N251 billion was supplemented by excess petroleum tax payments of N63 billion, an exchange-rate gain of N41 billion, the regular Nigeria National Petroleum Corporation (NNPC) refund of N6 billion and an undisclosed amount from Value Added Tax (VAT).
The report titled: ‘A marked decline in the FAAC payout’, said the figure fell below the forecast pro rata monthly average of N477 billion in the 2016 budget, which projects the net distribution from the Federation Account and the VAT pool combined at N5.72 trillion, for the first time in four months.
It said the three previous distributions were boosted by the impact of the Central Bank of Nigeria (CBN) ‘devaluation’ on June 20, adding that both petroleum receipts based on the US dollar price and customs revenues benefited from the adjustment.
The drop in FACC revenues was also caused by the state of force majeure at the Bonny terminal and the subsisting force majeure at the Forcados terminal as well as the drop in non-mineral revenue in September.
