In a remarkable start to the new year, Nigeria’s federation account recorded a staggering revenue of N1.674 trillion in December 2023.
This impressive figure not only reflects the nation’s economic stability but also presents an opportunity for growth and development across all sectors.
Out of the total revenue generated, N1.127 trillion was shared among the three tiers of government and other entities benefiting from the federation account.
This means that Nigeria’s fiscal year began with a surplus of over N500 billion, showcasing the nation’s commitment to financial prudence and saving for the future.
According to the communiqué from the Federal Account Allocation Committee (FAAC) released in Abuja breaking down the revenue for December 2023, it was reported that significant increases were observed in Companies Income Tax (CIT), Excise Duty, Petroleum Profit Tax (PPT), Value Added Tax (VAT), and Electronic Money Transfer Levy (EMTL).
However, there was a substantial decrease in Oil and Gas Royalties, and Import Duty and CET Levies experienced a slight decline.
Despite the remarkable revenue gains, the balance in the Excess Crude Account (ECA) remained stagnant at $473,754.57. While this may seem like a missed opportunity to bolster Nigeria’s emergency funds, the surplus in the federation account serves as a cushion for any unforeseen economic challenges that may arise in the near future.
A closer look at the activities surrounding the Federation Account reveals that N875.382 billion was received as gross statutory revenue for December 2023, which was slightly lower than the N882.560 billion received in November 2023. Although there was a marginal decrease, the revenue figures for December remained robust and indicative of Nigeria’s steady economic growth.
In terms of Value Added Tax (VAT), December 2023 saw a significant increase compared to the previous month. The gross revenue available from VAT stood at N492.506 billion, a remarkable N132.051 billion increase from November 2023. This surge in VAT revenue can be attributed to the improvement in economic activities and increased consumer spending during the festive season.
Further analysis of the revenue distribution revealed that the Federal Government received a total of N383.872 billion from the total distributable revenue of N1.127.408 trillion. Additionally, state governments received N396.693 billion, while local government councils received N288.928 billion. A sum of N57.915 billion, representing 13 percent of mineral revenue, was also shared among the benefiting states as derivation revenue.
Regarding distributable statutory revenue, the Federal Government received N173.729 billion, state governments received N88.118 billion, and local government councils received N67.935 billion from the N363.188 billion generated. Furthermore, N33.406 billion, representing 13 percent of mineral revenue, was shared as derivation revenue among the states that benefit from it.
From the distributable Value Added Tax (VAT) revenue of N458.622 billion, the Federal Government received N68.793 billion, state governments received N229.311 billion, and local government councils received N160.518 billion.
The Electronic Money Transfer Levy (EMTL) of N17.855 billion was allocated as follows: the Federal Government received N2.678 billion, state governments received N8.928 billion, and local government councils received N6.249 billion.
However, the stagnant Excess Crude Account raises concerns about the need for strategic investment of surplus funds into critical sectors. Additionally, the slight decline in statutory revenue and continued dependence on oil and gas require further attention.
The federation account recorded an outstanding revenue of N1.674 trillion in December 2023, setting the stage for economic progress and financial stability.
With over N500 billion saved for the new year, the nation can confidently embark on ambitious development projects and undertake necessary infrastructure investments.
The increase in various tax revenue sources signifies a thriving economy, and strategic allocation of funds to the three tiers of government ensures that the benefits of this revenue are spread across the nation, allowing for inclusive growth and prosperity.
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