The Federal Government deducted the sum of N35.51bn from allocation made to the states for external debt servicing, contractual obligations and others. The deductions, which were for the month of September, were made from the allocations given to state governments from the Federation Account.
The federation account is currently being managed on a legal framework that allows funds to be shared under three major components – statutory allocation, Value Added Tax distribution and derivation principle. Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments 20.60 per cent.
The framework also provides that Value Added Tax revenue be shared thus: FG, 15 per cent; states, 50 per cent; and LGs, 35 per cent. On the other hand, extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.
