The Federation Account Allocation Committee (FAAC or the “Committee”) disburses allocations from the revenues generated into the Federations Accounts, which comprise multiple accounts specific to an RGA or a sector/ business type. For example, Electronic Money Transfer Account and the Excess Crude Oil Account are two of many.
The revenues in the Federation accounts are allocated based on many factors, such as the 13% derivation, Statutory Allocations, Valued Added Tax (VAT) and distribution of exchange Gain difference, and the portions to be split between the three tiers of government.
The Federal Government receives 52.68% of the total sum while the State and Local governments receive 26.72% and 20.6-% respectively. A 13% derivation fund is shared among the oil-producing states the sum of N51.47bn was shared among the oil-producing states. The Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) all receive a portion of their generated revenues as cost of revenue collections.
Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that a certain percentage is disbursed to the FGN consolidated revenue account; a certain percentage is shared as a share of derivation and ecology; a Certain Percentage as stabilization fund; Certain Percentage for the development of natural resources; and Certain Percentage to the Federal Capital Territory (FCT) Abuja.
The 2 major Roles of FAAC are:
- To ensure that allocations made to the States from the Federation Account are promptly and fully paid into the treasury of each State on the basis and terms prescribed by the Allocation of Revenue act;
- To report annually to the National Assembly in respect of the function specified in the above paragraph.
COMPOSITION OF FAAC
The Federation Account Allocation Committee comprises the following Core members
Zainab Shamsuna AhmedMinister of Finance Budget and National Planning
Mr. Ahmed IdrisAccountant General of the Federation
The Federation Account Allocation Committee comprises the following Core members:
- The Honorable Minister of Finance Budget and National Planning - Chairman
- 36 State Commissioners of Finance - Members
- CBN representative – member
- RMAFC representative – member
- Accountant General of the Federation – member
- Permanent Secretary (FMFBNP) – member
- Secretary of Finance of FCT administration – member
- Two persons appointed by the President of Nigeria – member
- Home Finance Department (FMFBNP) – FAAC Secretariat
- 36 State Accountant Generals. – Non-member
STATE JOINT LOCAL GOVERNMENT ACCOUNT ALLOCATION COMMITTEE - SJLGAAC
This Committee was set up to ensure equitable distribution of the statutory allocations to local governments from the Federation Account and 10% of the internally generated revenue of the appropriate State Governments is shared under the beneficiaries, in accordance with the 1999 Constitution, using the criteria as Equality, Population, Primary School Enrolment and Internally Generated Revenue Data.
- The Permanent Secretary for Local Government Affairs;
- All the Chairmen of the Local Governments in the States
- A representative of the Accountant-General of the State
- The Federal Pay Officer in the State
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