Subsidy Removal: Nigerian Govt’s Revenue Doubles As FG, States, LGs To Share N907B In July

The total distributable revenue, available to be shared between the three tiers of the Nigerian government, increased from about N786.161 billion in May to about N1.9 trillion in June, over a 100 per cent increase.

The three tiers of the Nigerian government, however, agreed to share less than half of the revenue earned in June among themselves after agreeing to save a large chunk of the revenue, an official has said.

Dele Alake, spokesperson to President Bola Tinubu, said in a statement that the federal government, states and local governments shared N907 billion of the total N1.9 trillion (48 per cent shared) revenue earned in June.

The amount shared in June was still over N100 billion higher than the N786 billion shared between the three tiers of government for May.

Of the almost N1 trillion remaining of the June revenue, Mr Alake said, “N790 billion will be saved, and the rest will be used for statutory deductions.”

The total N786 billion shared for May was after deductions but is still less than half of the distributable revenue for June (N907 billion shared + N790 billion saved).

Mr Alake suggested that saving a large chunk of the June revenue was a way of managing inflation that would have arisen if all the revenue was shared in the aftermath of the recent removal of petrol subsidy.

“The committee also resolved to save a portion of the monthly distributable proceeds to minimize the impact of the increased revenues occasioned by the subsidy removal and exchange rate unification-on money supply, as well as inflation and the exchange rate,” Mr Alake wrote.

Recall that President Tinubu had on 29 May, during his inauguration, announced the removal of subsidy on petrol which the government was spending almost a trillion naira on monthly.

The removal of the subsidy has caused hardship for many Nigerians with its attendant increase in the prices of goods and services.

However, the subsidy removal also led to increased government revenue with total distributable revenue increasing from about N786.161 billion in May to about N1.9 trillion in June as the government earned money that would in the past be used to subsidize petrol.