The revenue of the Federation Account earnings (FAAC) rose to N6.28 trillion in the second quarter of 2024, driven by significant collections from Value Added Tax (VAT), customs, and excise duties.
These sources dominated earnings within the federation account during the period, contributing 72.42% of the total revenue.
According to the Central Bank of Nigeria’s economic report, non-oil revenue accounted for N4.55 trillion, reflecting a 32.22% increase compared to the preceding quarter.
The revenue also exceeded the government’s target by 23.07% during the same period.
The increase was largely attributed to higher collections from the federal government’s independent revenue sources, VAT, and customs and excise duties.
While there was marginal growth in oil revenue, its contribution to FAAC in Q2 2024 was minimal, accounting for just 13.23% of the total allocation.
The shift from oil revenue to other sources of income in the Federation Account will indicate a different approach to FAAC allocation.
Meanwhile, as the federal government intensifies efforts to boost oil production, there is potential for further increases in FAAC allocations in the coming months.
