How FG, states, LGs profit from depreciating naira – Nigerian Tribune

Even as Nigerians groan under the burden of depreciating naira, direct beneficiaries of the Federation Account have continued to smile to the bank month after month sharing the widening differentials between the N190/US$ upon which the 2016 budget was based and whatever it depreciates to.

In February 2016, federal, states and local governments shared some N48.370 billion described as exchange gain for the month of January, 2017.

The increasing exchange rate gain also signposts rising income from crude oil export as a result of both rising prices and increased production.

A shuttle diplomacy to oil producing communities by Acting President Yemi Osinbajo in the last few months leading to current crude production level of about 2.1 million barrels per day has combined with higher prices on the international market presently hovering around $55 per barrel to improve accruals into federation account.

An additional advantage of this is the improvement in the position of Nigeria’s foreign reserves presently standing at around $30 billion.

An official of the Federal Ministry of Finance who spoke with our correspondent explained that extra income from excess exchange gain has always been a succour in times of lean income.

According to the source that craved anonymity, there had been times when Central Bank of Nigeria (CBN) was prevailed upon to suppress appreciation of the naira so that governments would have enough naira to fund its local obligations.

Highest oil producing states got the largest portion of the N25.7 billion, which accrued to states and local governments with Akwa Ibom getting N2.4 billion; Rivers N1.7 billion; Delta N1.5 billion and Bayelsa N1.4 billion; while Federal Government collected the remaining N22.6 billion.

January allocation from Federation Accounts Allocation Committee (FAAC) also marked the re-emergence of oil producing states as champions of federation account as Akwa Ibom, and her 31 local government councils got a total of N19.9 billion for the month.

Rivers State got the next highest allocation followed by Lagos and then Kano with N13.1 billion, N12.8 billion and N10.8 billion respectively.

Delta, with allocation of N10.6 billion, and Bayelsa with N9.5 billion followed in that order.

During the month under review, Oyo was allocated N7.0 billion, Ondo got N6.0 billion, Ogun-N4.0 billion, Nassarawa-N4.3 billion, Osun-N3.6 billion and Ekiti-N3.5 billion.

It was however, observed from documents available to Nigerian Tribune that Lagos and Osun states lost their share of gross statutory and mineral revenue to various deductions due to debt payments.

For Lagos, the mount lost was N2.386 billion while that of Osun State amounted to N1.624.

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