States have ruled out borrowing to bridge their funding gaps.
The chairman of the Finance Commissioners Forum, Adamawa State Commissioner for Finance Mahmood Yunusa, yesterday told reporters at the end of the Federation Account Allocation Committee (FAAC) meeting in Abuja that “states are not looking at borrowing to augment the funding gaps.”
According to him, state governments are now looking at cutting costs and working closely with the federal government to increase non-oil revenue particularly Value Added tax (VAT), withholding tax and stamp duty to make more money.
Accountant General of the Federation Idris Ahmed said “the total revenue distributable for the month of September including VAT is N558.082 billion.
From this amount, the federal government took N234.286 billion, states and the Federal Capital Territory (FCT) got N152.739 billion, local government councils received N114.918 billion. Oil mineral producing states got an additional N40.216 billion under the 13 per cent derivation principle.
Ahmed noted that gross statutory revenue of N423.961 billion received for the month was lower than the N550.992 billion received in the previous month by N127.023 billion.
The AGF noted that “there was significant increase in revenue from export sales of $176.4 million due to an increase in crude oil production by 4.12 million barrels. However, the average price of crude oil decreased from $50.44 to $46.29 per barrel.”
Idris Ahmed added that “activities resumed at Forcados Terminal for the first time since February 2016. There were shut-ins and shut-downs at Terminals for maintenance and repairs.”
Oil royalty, he said recorded significant increase in the month under review but there was considerable decline in revenue from companies Income tax , petroleum profit tax, import duty and VAT.”
It was also revealed that the balance in the Excess Crude Account (ECA) still stands at $2.309 billion while the balance in the excess Petroleum Profit Tax (PPT) stands at $68 million as at October 20.
