 has allocated a total of N1.678 trillion to the Federal Government, state government){kind=link}
The Federation Account Allocation Committee (FAAC) has allocated a total of N1.678 trillion to the Federal Government, state governments, and local government councils for February. This comes amidst concerns over revenue shortfalls. The allocation was announced by the Director, Press and Public Relations. This office belongs to the Accountant-General of the Federation, Bawa Mokwa. It reflects a significant decrease in revenue generation. This is compared to previous months.
According to the FAAC communiqué, the total revenue of N1.678 trillion comprises statutory revenue of N827.633 billion, Value Added Tax (VAT) revenue of N609.430 billion, and other revenues. The allocation was shared among the three tiers of government as follows:
- – Federal Government: N569.656 billion
- – State Governments: N562.195 billion
- – Local Government Councils: N410.559 billion
- – Derivation Revenue: N136.042 billion (13% of mineral revenue) shared among benefiting states
The FAAC allocation for February reflects a significant decrease in revenue generation compared to previous months. According to the communiqué, the total gross revenue of N2.344 trillion available in February was lower than the N2.635 trillion available in January. The decrease in revenue generation is attributed to several factors, including the decline in oil prices, reduction in oil production, and the impact of the COVID-19 pandemic on the economy.
We spoke to Dr. Biodun Adedipe, a renowned economist, to get his analysis on the FAAC allocation and the revenue shortfalls. “The decrease in revenue generation is a cause for concern. It may impact the government’s ability to fund its projects and programs,” Dr. Adedipe said. “However, it is essential to note that the government has been working to diversify its revenue streams and reduce its dependence on oil revenue.”
The FAAC allocation for February highlights the need for the government to intensify its efforts. It should diversify its revenue streams. It must also reduce its dependence on oil revenue. According to Dr. Adedipe, the government can explore alternative sources of revenue, such as taxation, to bridge the revenue gap. “The government must also work to reduce its expenditure and prioritize its projects and programs to ensure that it is getting value for money,” Dr. Adedipe said.