African Reserves

Nigeria: Again NNPC did not contribute to Federation account in March

The Nigerian National Petroleum Company (NNPC) again failed to deposit money into the federation account, a joint pool run by the country’s federal, state and local governments in March.

Together with the inability of the national oil company to contribute last month, this means that since this year the NNPC has not funded the statutory common account at all.

On Wednesday, the Federation Accounts Allocation Committee (FAAC) shared a total sum of N725.57 billion between the three levels of government, as the federal allocation for the last month.

The amount represented a 23% increase from the 590 billion naira shared by the three levels of government in February, with statutory revenue accounting for 521.16 billion naira and value added tax (VAT) being 204.40 billion naira.

At the meeting, the federal government received 277.10 billion naira, states received 227.2 billion naira while local government areas received 167.91 billion naira.

But on the amount, although the NNPC paid nothing, oil profit tax, oil and gas royalties contributed to the FAAC distribution while import and excise duties, the corporate income tax and value added tax all recorded increases.

An analysis of NNPC’s submission to FAAC showed that while the grant would swallow N671.88 billion in April, to be shared in May, the oil company paid nothing out of its N1.473 trillion annual budget.

It showed that the NNPC spent 210.38 billion naira, 219.78 billion naira and 245.77 billion naira on petrol subsidies in January, February and March 2022 respectively, for a total of 675.93 billion naira on gasoline.

Despite rising international crude oil prices, Nigeria has failed to benefit as it imports all products from abroad, on which it will spend 4 trillion naira this year, nearly a quarter of its N17.1 trillion budget for the year.

Nigeria’s external reserves lost $840.6 million in the last 116 days from January 1, 2022 to April 26, according to official data, falling to $39.67 billion as of April 26 from $40.518 billion in January 1, 2022.

In the first quarter of 2022 ending March, reserves fell by $971.36 million, from $40.518 billion on January 1 to $39.55 billion on March 31.

The Muhammadu Buhari administration recently postponed the implementation of the full subsidy cut for 18 months, thus pushing it back to the next government which will start in May next year.