Between July and December 2023, the Federation Account saw an increase in revenue inflow, with a total of N7.3tn accrued, as disclosed by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC).
This amount, shared by the Federation Account Allocation Committee, was remitted to the Central Bank of Nigeria under the title “CBN Federation Account Component Statement,” according to a press statement signed by Mr. Mohammed Bello Shehu, the Chairman of RMAFC.
The reported N7.3tn figure exceeded the N5.24tn recorded in the first half of 2023, indicating a significant rise in revenue for the period.
Out of the total gross revenue inflow into the Federation Account, N1.69tn was transferred to the Exchange Gain Differential Account, leaving N5.475bn for distribution after deducting N3.26tn as approved statutory deductions by the Office of the Accountant General of the Federation (OAGF).
Within the specified period, N4tn was shared among the three tiers of government after statutory deductions and transfers to accounts like the Non-Oil Excess Account for savings.
The second-half statutory deductions constituted 44.12% of the total gross inflow, higher than the first half’s 42.31%, including transfers to accounts like the Non-Oil Excess Account.
RMAFC also highlighted the improved remittances from Revenue Generating Agencies in the second half, with notable amounts coming from entities like the Nigerian National Petroleum Company Limited, the Nigerian Upstream Petroleum Regulatory Commission, and the Federal Inland Revenue Service.
Government revenue received a boost from policy changes such as the removal of fuel subsidy and the unification of the foreign exchange market, leading to increased earnings.
However, despite the positive impact on government revenue, citizens are grappling with the harsh economic implications brought about by these policies.
In a bid to enhance revenue generation and remittances further, the RMAFC chairman proposed that the cost of collection for revenue-generating agencies should be linked to their performance, aiming to incentivize proactive revenue generation for the Federation Account.
This proposed incentive structure is envisioned to encourage RGAs to develop innovative strategies for revenue enhancement, leading to increased remittances and overall revenue generation, aligning the cost of collection with performance outcomes.
“We advocate for tying the cost of collection to revenue performance, ensuring that each RGA receives a proportional cost based on actual revenue generated relative to its targets, as stipulated in the Appropriation Act,” concluded the RMAFC chairman.