NEWS

A’Ibom Gets N50bn, Osun N4bn As FG, Others Share N1.9trn In Q1

Credit: Graphics by e360

The Federation Account Allocation Committee (FAAC) disbursed N1.938 trillion in the first quarter (Q1) 2018.

The amount shared represents an increase of 37.3percent when compared with N1.411 trillion shared during the same period in 2017 and 71.1percent of the N1.132 trillion shared in the same quarter of 2016.

A breakdown of the FAAC allocations shows that the Federal Government received N812.8 billion, the 36 states got N683.4 billion, while N393.3billion went to the 774 Local Governments within the period under review.

A month by month analysis shows that N655w.2 billion was disbursed by FAAC in January, N635.6 billion in February, and N647.4 billion in March this year.

The information is contained in the latest edition of the NEITI Quarterly Review by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The publication observed that even with increasing trends in the revenue disbursements to the three tiers of governments, the disbursement in the first quarter of 2018 is still 25.6percent lower than the N2.6 trillion disbursed during the same period in 2013 before the crash in global oil prices.

However, the report projected brighter prospects for higher revenue disbursements for the rest of the year due to the rising oil prices, which currently hovers around $70 per barrel, in addition to the increase in oil production.

It nonetheless called for caution while celebrating the amounts disbursed in the first quarter of 2018 due of the volatility of the international oil market. “The year started on a bright note as all tiers of government received higher revenues than corresponding quarters in the past two years. This was largely on the account of sustained increase in domestic oil production and global oil prices,” the NEITI report added.

On allocations received by each state, the report reveals that Akwa Ibom got the highest amount of N50.44 billion while Osun State received the lowest net share of N4.99 billion, a variance of 920percent between the highest and the lowest.

It explained that these disparities in FAAC disbursements suggest differences in revenue capacities of different states and the implications for expenditure decisions in the affected states.

The publication expressed concerns about the relationship between the projected revenues of states and their proposed budgets. “The budget of all states completely outstrips their projected total revenues,” the report stated. For instance, the publication observed that the gap between projected total revenues and budgets is small in some states like Kano, Enugu, Delta and Bayelsa. In these states, projected revenue is at least 60percent of the budgets.

However, in about 18 states, projected revenue is less than 40percent of budgets. Examples are in the 2018 budgets of Adamawa, Akwa Ibom, Anambra, Bauchi, Benue, Borno, Cross River and Ebonyi states. Other states are Imo, Katsina, Kebbi, Kwara, Ogun, Osun, Oyo, Plateau, Sokoto and Zamfara). In particular, the NEITI report described the situation in Cross River State as chronic as its projected total revenue only constitutes 4percent of the proposed budget.

The NEITI report further cautioned that “These conditions will ultimately result in a situation where the states will either not be able to execute their budgets or have to increase borrowing”.

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