By Tony Obiechina, Abuja

Federal Government’s revenue accruals to Federation Account is projected to rise to N24.54 trillion in 2024 from N11.86 trillion estimated in 2023, as revenue from the main pool is projected to be N20.70 trillion while Value Added Tax (VAT) pool and Electronic Money Transfer Levy (EMTL) are projected at N3.

This was even as the Federation Account Allocation Committee (FAAC) shared a whopping N903.480 billion to the three tiers (FG, States and LGAs) for the month of Sept.

Director General of Budget Office of the Federation, Mr. Ben Akabueze who disclosed this on the sidelines of the 29th Nigerian Economic Summit in Abuja; gave a breakdown into the 2024-2026 Medium Term Framework and Fiscal Strategy document (MTEF).

Akabueze said the draft 2024-2026 paper was prepared against the backdrop of democratic transition to reflect current realities and new direction of President Bola Tinubu’s administration in addressing key policy and fiscal challenges.

The document showed key parameters to drive the medium-term revenue and expenditure framework for Nigeria in 2014 include: Oil benchmark:2024- $73.96; 2025- $73.76; 2026- $69.90. Oil Production (Mbps): 1.78; 1.80; 1.81. Exchange rate N/$: 700/$; 665.61/$; 669.79/$. Inflation: 21.40 per cent 20.30 percent; 18.60

Other parameters are: Non-oil GDP: Non-Oil GDP (N’bn): N223,989.2; N249,188.0; N278,251.7. Oil GDP (N’bn): 2024-N12,316.0; 2025- N13,225.7; 2026-N14,272.0. Nominal GDP (N’bn): N236,305.2; N262,413.7; N292,523.7. GDP Growth Rate (%): 3.76; 4.22; 4.78. Imports: 32,453.5; 33,401.3; 34,515.4 and Nominal Consumption (N’bn): N163,227.8; N189,992.8; N218,594.2

The projected exchange rates for the Nigerian Naira (N) against the U.S. Dollar ($) are 700 Naira to 1 Dollar in 2024, 665.61 Naira to 1 Dollar in 2025, and 669.79 Naira to 1 Dollar in 2026. These rates reflect the assumed values used for currency conversion in economic calculations.

The oil benchmark reflects the expected price of oil in the years 2024, 2025, and 2026, which increases slightly in 2025 before decreasing in 2026. Oil production is expected to increase slightly over the three-year period.

The exchange rate is expected to fluctuate, decreasing significantly in 2025 before increasing slightly in 2026 while inflation is expected to decrease over the three-year period.

Non-oil GDP is expected to increase steadily, while oil GDP is expected to increase slightly. Nominal GDP which represents the estimated total value of goods and services consumed in the Nigerian economy is expected to increase steadily, with a growth rate of around 4% each year.

Imports which are the estimated total value of goods and services imported into Nigeria are expected to increase over the three-year period, while nominal consumption which represents the estimated total value of goods and services consumed in the Nigerian economy is expected to increase steadily.

These figures indicate that Nigeria’s economy is expected to maintain steady growth over the next few years, with some fluctuations in key parameters such as the exchange rate and oil benchmark. However, there may be continued challenges with inflation and a heavy reliance on oil as a primary source of revenue.

 “Accordingly, economic growth is projected to increase to 3.76 per cent, 4.22per cent and 4.78 per centin 2024, 2025 and 2026, respectively, mainly due to strong political will to take tough decisions and implement necessary reforms”, it stated.

The document added that “most of the growth in real GDP during the period will be driven by the anticipated increase in domestic oil refining capacity, telecommunications, crop production, slight growth in investment and employment, with the bulk of projected growth coming from the non-oil sector”

It noted that “the Renewed Hope Agenda (RHA) of the Tinubu Administration has significantly higher growth targets than the National Development Plan (NDP) 2021-25. The NDP is therefore undergoing a review to align its growth aspirations with the RHA”.

Consumption in nominal terms is projected to increase to N163.23 trillion in 2024 and N218.59 trillion in 2026 substantially due to expected increase in wages and cash transfers to households to mitigate the negative impact on their real income of petrol subsidy removal.

Import of goods is projected to increase to N32.45 trillion in 2024 and gradually to N34.51 billion in 2026 due mainly to the effects of depreciation of the domestic currency and imported inflation.

“Inflationary pressure is projected to continue at 21.4% in 2024. A slight reduction in inflation pressure is anticipated from 2025 and 2026 due to the lag effect of tight monetary policy on demand for goods and services, expected lower deficit financing and reduction in supply-side constraints occasioned by a drastic reduction in domestic insecurity, improved infrastructure, and generally better operating environment for businesses’”

The Federation Account Allocation Committee (FAAC) which shared N903.480 billion to the Federal Government, States and Local Government Areas (LGAs) for the month of Sept was chaired by the Minister of Finance and Coordinating minister of the Economy, Mr. Wale Edun on Tuesday at the Ministry of Finance in Abuja.

From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL) and Exchange Difference, the Federal Government received N320.543 billion, the States got N287.071 billion while the Local Government Councils collected N210.900 billion.

The Oil Producing States received N84.966 billion as Derivation being the 13% of Mineral Revenue allocated every month.

Also, the sum of N54.426 billion was given as cost of collection, N347,857 billion allocated to Transfers and Refunds, while the sum of N289.000 billion was transferred to Non-Oil Revenue (Savings) for the month of September 2023.

According to the communique, the Gross Revenue available from the Value Added Tax (VAT) for September 2023, was N303.550 billion, which was a decrease from the N345.727 billion distributed in the preceding month, resulting in a decrease of N42.177 billion.

From that amount, the sum of N12.142 billion was allocated for Costs of Collection and the sum of N8.742 billion given for Transfers and Refunds. The remaining sum of N282.666 billion was distributed to the three tiers of government of which the Federal Government got N42.400 billion, the States received N141.333 billion, Local Government Councils got N98.933 billion.

Accordingly, the Gross Statutory Revenue of N1014.953 billion received for the month was higher than the sum of N891.934 billion received in the previous month of August, 2023 by N123.019 billion. From that amount, the sum of N41.826 billion was allocated to Costs of Collection, a total sum of N339.115 billion for Transfers and Refunds and the sum of N211.000 was transferred to Non-Oil Revenue (Savings).

The remaining balance of N423.012 billion was distributed as follows to the three tiers of government: Federal Government was allocated the sum of N190.849 billion, States got N96.801 billion, LGCs got N74.629 billion, and Oil Derivation (13% Mineral Revenue) got N60.733 billion.

Also, the sum of N11.447 billion from Electronic Money Transfer Levy (EMTL) was distributed to the three (3) tiers of government as follows: The Federal Government received N1.648 billion, States got N5.495 billion, Local Government Councils received N3.846 billion and N0.458 billion was allocated to Costs of Collection.

The Communique disclosed that N264.813 billion from Exchange Difference, which was shared as follows: FG received N85.647 billion, the States got N43.442 billion, the sum of N33.491 billion allocated to the LGCs, and N24.233 billion given to Derivation (13% of Mineral Revenue) while the sum of N78.000 billion was transferred to Non-Oil Revenue (Savings).

Petroleum Profit Tax (PPT) and Oil and Gas Royalties increased considerably, while Value Added Tax (VAT), Import and Excise Duties, Electronic Money Transfer Levy (EMTL), Companies Income Tax (CIT) and Custom External Tariff (CET) levies recorded significant decreases.

According to the FAAC, the total revenue distributable for the current month of September 2023, was drawn from Statutory Revenue of N423.012 billion, Value Added Tax (VAT) of N282.666 billion, N10.989 billion from Electronic Money Transfer Levy (EMTL) and N186.813 billion from Exchange Difference, bringing the total distributable amount for the month to N903.480 billion.

The balance in the Excess Crude Account (ECA) as at October 24, 2023 stands at $473,754.57.ade