N7.3tn Remitted to Federation Account in six months

A total of N7.3 trillion accumulated into the Federation Account between July and December 2023, according to the Revenue Mobilization Allocation and Fiscal Commission, indicates a rise in revenue inflow.

The Central Bank of Nigeria received the funds shared by the Federation Account Allocation Committee, it stated, with a caption reading “CBN Federation Account Component Statement.

“The RMAFC Chairman, Mr. Mohammed Bello Shehu, signed a press release that the commission provided on Thursday in Abuja. The statement stated that the amount is greater than the N5.24 trillion realized in the first half of 2023.Shehu claims that N1.69 trillion of the gross revenue inflows into the Federation Account were moved to the Exchange Gain Differential Account, leaving N5.475 billion available for distribution.

He continued by saying that during the period under review, N2.2tn remained as a net balance for distribution among the three tiers of government after N3.26tn was subtracted from the amount mentioned above as authorized statutory deductions by the OAGF.

The chairman went on to say that of the N3.267tn statutory deduction mentioned above, N2.251tn was moved as savings to the Non-Oil Excess Account, leaving a net statutory deduction of N1.016tn with additional augmentations supplied by various “reserve accounts” for distribution among the three levels of government.

The statement also stated that the three levels of government divided the net amount of N4 trillion during the period under review.In terms of percentages, the chairman emphasized that “the first half deductions of 42.31 percent (inclusive of transfer to the Non-Oil Excess Account) were less than the statutory deduction in the second half of the year, which constituted 44.12 percent of the total gross inflow into the Federation Account in the six-month period.”

Regarding remittances by Revenue Generating Agencies, the head of RMAFC revealed that the Nigerian National Petroleum Company Limited remitted N874 64 billion in the second half of the year, compared to zero in the first half, of the total gross revenue inflows into the Federation Account.Furthermore, N1.56 trillion was remitted by the Nigerian Upstream Petroleum Regulatory Commission and N3.65 trillion was remitted by the Federal Inland Revenue Service.

After the current administration removed the fuel subsidy and unified the foreign exchange market, the government’s revenue increased.The harsh economic realities are being felt by the citizens, despite the fact that these policies increased government revenue.

In a related development, the chairman of the RMAFC has argued that in order to increase revenue generation and remittances, revenue-generating agencies’ cost of collection should now be correlated with their performance.The purpose of the RMAFC chairman’s proposal is to encourage RGAs to take a more proactive approach to raising money for the Federation Account.

He clarified that in order to raise the cost of collection, such a move would further encourage RGAs to develop new strategies for boosting revenue generation and remittances.”We fervently support linking RGAs’ cost of collection payments to revenue performance.

Put another way, as stipulated in the Appropriations Act, each RGA should get a cost of collection commensurate with the revenue generated against its revenue target,” he said.