Non-provision of bank details stalls direct payment of N361b
By Jeph Ajobaju, Chief Copy Editor
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“The LGAs have to be coordinated. Those that have opened accounts with the CBN did not submit their details to FAAC for crediting, resulting in the delay.
“If this information is not ready, they will not be paid. But if they produce it, they will be paid” – source
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Bureaucratic lapses have hindered the planned first direct revenue allocation from the Federal Account to the 774 councils nationwide with a total N361.754 billion share of distributable revenue from the N1.424 trillion due to the three tiers of government in January.
The federal government had planned to commence direct payment to the accounts of the councils from this month, but it was confirmed at the recent January 2025 Federation Account Allocation Committee (FAAC) meeting in Abuja that the councils failed to submit bank account details required.
“The structures are yet to be erected,” a source familiar with the process told The Nation, referring to the absence of bank accounts specifically opened with the Central Bank of Nigeria (CBN) for this purpose.
“The LGAs have to be coordinated. Those that have opened accounts with the CBN did not submit their details to FAAC for crediting, resulting in the delay.
“If this information is not ready, they will not be paid. But if they produce it, they will be paid.”
Another source speculated that political interference and delay in conducting local government elections in some states may have also contributed to the hiccup.
“The LGAs may have been handicapped by the maneuvering of state governments and the ongoing elections to elect local government officials recognised by law to spend the money,” the source said.
FAAC officials expect the local governments to resolve the bottlenecks by the end of January to enable them receive their allocations.
Following the Supreme Court ruling in July 2024 granting councils financial autonomy, Abuja directed them to open accounts with the CBN specifically for receiving monthly allocation from the Federation Account.
The federal government, states, and local governments shared N1.424 trillion in January.
FAAC Director of Press and Public Relations Bawa Mokwa confirmed that a total N1.424 trillion, the Federation Account revenue for December 2024, was shared by the three tiers of government after it was finalised at the January meeting of the committee in Abuja.
According to Mokwa, distributable revenue comprised N386.124 billion from statutory revenue, N604.872 billion (Value Added Tax, VAT), N31.211 billion (Electronic Money Transfer Levy, EMTL), and N402.714 billion (exchange rate difference).
Total gross revenue for December 2024 amounted to N2.310 trillion, from which N84.780 billion was deducted for collection costs, and N801.175 billion allocated for transfers, interventions, and refunds.
Gross statutory revenue for December 2024 stood at N1.226 trillion, a decline of N600.988 billion from N1.827 trillion in November 2024.
In contrast, VAT collections increased with December 2024 grossing N649.561 billion, exceeding N628.973 billion by N20.588 billion collected the previous month.
From the total distributable revenue of N1.424 trillion, the federal government received N451.193 billion, state governments (N498.498 billion), and local government areas (N361.754 billion).
An additional N113.477 billion, representing 13 per cent derivation revenue, was shared among oil-producing states.
Out of the N386.124 billion distributable statutory revenue, the federal government received N167.690 billion, states (N85.055 billion), and councils (N65.574 billion), with N67.806 billion allocated to oil-producing states as derivation.
From N604.872 billion distributable VAT revenue, the federal government received N90.731 billion, states (N302.436 billion, and councils (N211.705 billion).
From N31.211 billion EMTL, the federal government received N4.682 billion, states (N15.605 billion), and councils (N10.924 billion).
The N402.714 billion exchange rate difference revenue was shared with the federal government receiving N188.090 billion, state governments (N95.402 billion), and councils (N73.551 billion). Oil-producing states got N45.671 billion as derivation.
A communiqué issued by FAAC noted significant increase in VAT and EMTL collections, and considerable declines in revenues from Oil and Gas Royalty, CET Levies, Excise Duty, Import Duty, Petroleum Profit Tax (PPT), and Companies Income Tax (CIT).
FAAC reiterated its commitment to ensuring equitable and transparent revenue sharing among the three tiers of government to foster economic growth and development.
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