Emmanuel OchayiThe Federation Account Allocation Committee (FAAC) disbursed N1.80 trillion to the three tiers of government in August 2023, marking a decrease of N0.9 trillion from the N1.89 trillion disbursed in July 2023.
While the National Bureau of Statistics (NBS) released the FAAC disbursement report for August, it failed to provide reasons for this drop, leaving analysts and government officials puzzled.
The August 2023 FAAC disbursement report unveiled a breakdown of the funds, indicating that N1.15 trillion came from the Statutory Account, N56.31 billion from the Exchange Rate Differential, N283.91 billion from Exchange Gain, N13.37 billion from Electronic Money Transfer Levy (EMTL), and N298.79 billion from Value Added Tax (VAT).
According to the report, the Federal Government received N391.93 billion, states were allocated N319.52 billion, and local governments received N236.23 billion. Furthermore, N56.49 billion was shared among the oil-producing states from the 13 percent derivation fund.
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In a rare move, the report disclosed that N62.42 billion was returned to the revenue-generating agencies as the cost of collection. This cost was distributed as follows: Nigeria Customs Service (NCS) received N15.51 billion, the Federal Inland Revenue Service (FIRS) obtained N39.53 billion, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was allocated N7.38 billion.
While the reasons behind this sudden drop in FAAC disbursement remain unclear, analysts and government officials are closely monitoring the situation to understand the economic implications and potential factors contributing to the decrease.
In a separate development, the Debt Management Office (DMO) has announced the subscription process for two-year and three-year Federal Government of Nigeria bonds for October 2023, offering an attractive interest rate of up to 13.4 percent. The subscription period will last for five days, running from November 6th to November 10th, 2023.
The two-year and three-year bonds are set to mature on November 15th, 2025, and November 15th, 2026, respectively, with an interest rate of 12.464 percent per annum for the former and 13.464 percent per annum for the latter. Coupon payments are scheduled for February 15, May 15, August 15, and November 15, with quarterly interest payments.
The DMO outlines the units of subscription as “N1,000 per unit, subject to a minimum subscription of N5,000, and subsequent multiples of N1,000, with a maximum subscription limit of N50,000,000.” Investors and financial experts are expected to closely evaluate the offering in light of the changing economic landscape.
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