The Federation Accounts Allocation Committee (FAAC) on Tuesday shared the sum of N652.2bn as statutory allocations for the month of June to Federal, States and Local Governments.
The amount is made up of revenues generated from oil and non-oil sources that were paid into the Federation Account.
Addressing journalists shortly after a meeting that was held at the headquarters of the Ministry of Finance, the Accountant-General of Federation, Alhaji Idris Ahmed, put the statutory revenue received during the month at N570.8bn.
This, he added, represented an increase of N253bn over the N317.56bn received in May.
Giving a breakdown of the N652.22bn shared, he said the Federal Government got N286.6bn; the states, N178.61bn; and local government councils, N134.92bn.
Ahmed added that the sum of N29.89bn was approved for sharing to oil-producing states based on the 13 per cent derivation principle.
Asked if Lagos State had started enjoying the 13 per cent derivation formula as an oil-producing state, the AGF said the state was already recognised as such.
He said, “Lagos is already being identified as an oil-producing state; the first hurdle has been crossed.
“The relevant agencies to determine the quantity of oil that is being produced from Lagos is working round the clock. We are on course; Lagos already know its position.”
He added that there was a decrease in the crude oil export volume in June, which affected oil revenue.
Ahmed explained, “The decrease in the average price of crude oil from $55.18 to $50.27 per barrel and a significant decrease in export volume by 3.20 million barrels resulted in decreased revenue from export sales for the federation by $183.68m.
“Crude oil production suffered due to leakages, shut-ins and shutdowns at terminals for maintenance and force majeure declared at the Forcados terminal since February.
“There were significant increases in Company Income Tax, being the peak period for its collection, and Petroleum Profit Tax. Also, Value Added Tax, import and excise duties recorded marginal increases.”
Also retained were the Liquidity Ratio at 30 per cent; and the Asymmetric Window at +200 and -500 basis points around the MPR.
Explaining the reason for holding the rates despite calls by the Minister of Finance, Mrs. Kemi Adeosun, and the Senate President, Bukola Saraki, for a reduction, Emefiele said that inflation rate, expected to fall by August, still had a strong base effect on the monetary policy stance.
According to him, the MPC believes that at this point, developments in the macro economy suggest the options of either to hold or to ease the monetary policy stance.
He said the committee was not unmindful of the high cost of capital and its implications on the ailing economy, but noted the liquidity surfeit in the banking system and the continuous weakness in financial intermediation.
While easing at this point will signal the committee’s sensitivity to growth and employment concerns by encouraging the flow of credit to the real economy, he stated that the rate of inflation, currently at 16.1 per cent, was capable of retarding growth.
He added that any reduction in interest rate at this time would reduce the cost of debt servicing, which was actually crowding out government expenditure.