The Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, indicated yesterday that the Federal Government intends to reduce the amount of cash in circulation as a strategy to control inflation. This step is seen as necessary to maintain a stable and desirable inflation rate.
Edun, who was inaugurated on Monday as minister, spoke in Abuja while chairing the Federation Account Allocation Committee (FAAC) meeting.
“There should be discipline in money supply to control inflation in the nation’s economy,” the minister told FAAC members.
By emphasing discipline in money supply, the CME Finance minister is referring to the need to carefully regulate the creation and circulation of money in the economy.
On the monetary side, it involves controlling the growth of money supply through various measures, such as adjusting interest rates, open market operations, or setting reserve requirements for banks.
On the Fiscal side, caution will be required on how the federal, state and local governments disburse money.
By maintaining discipline in money supply, the government aims to keep inflation within a target range that is conducive to stable economic growth and price stability.
Ultimately, the objective is to strike a balance between ensuring adequate money supply to support economic growth and preventing excessive inflation that can erode the value of currency and cause economic instability.
The finance minister also noted that there was the need for government to mobilise resources to deliver on its mandate to increase employment and reduce poverty.
The FAAC agreed to share N966.11 billion as federal allocation to the three tiers of government for last month.
The amount was shared from a total gross revenue of N1.746 trillion.
The total revenue was made up statutory revenue of N397.42 billion; Value Added Tax (VAT) revenue of N271.95 billion; Electronic Money Transfer Levy (EMTL) revenue of N12.84 billion and Exchange Difference revenue of N283.9 billion.
For last month, the total deductions for cost of collection came to N62.42 billion, while the total deductions for savings, transfers, refunds, and tax credit cancellation amounted to N717.96 billion.
The Excess Crude Account (ECA) stood at $473,754.57.
A communiqué made available to reporters after the meeting further detailed the distribution of the total distributable revenue.
Of the N966.11 billion, the Federal Government got N374,48 billion, state (N310.67 billion) and the 774 local government areas went home with N229.41 billion.
Additionally, N51.55 billion was shared among the relevant states as 13 per cent derivation revenue.
The gross statutory revenue for the month of July was N1.15 trillion, which was lower than the N1.15 trillion generated in the preceding month (June) by N2.49 billion.
From the available N397.42 billion as statutory revenue, the federal government was given N190.49 billion, the 36 states got N96.62 billion and the councils shared received N74.49 billion.
The oil producing states got N35.82 billion as 13 per cent derivation.
For July, the available gross revenue from VAT was N298,79 billion, which was higher than the N293.41 billion available in June by N5.38 billion.
The federal government received N40.792 billion, the states (N135.97 billion) and councils (N95.18 billion) from the N271.94 billion distributable VAT revenue.
The N12.84 billion EMTL was shared among the federal government, which got N1.93 billion, the state governments, which received N6.42 billion and the local government areas (N4.49 billion).
From the N283.9 billion Exchange Difference revenue, the Federal Government received N141.28 billion, the state governments (N71.66 billion, the councils received N55.245 billion, and N15.72 billion was shared among the relevant states as 13 percent mineral revenue.
The statement highlighted substantial rises in Imports and Excise Duties, along with the Electronic Money Transfer Levy (EMTL), during the previous month. Conversely, there were marked decreases in earnings from VAT, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), and Oil and Gas Royalties.
