The Nigerian Extractive Industries Transparency Initiative (NEITI) has urged the three tiers of government to be cautious over increase in revenue disbursements from the Federation Account Allocation Committee (FAAC).
The latest NEITI Quarterly Review of revenue disbursement released in Abuja on Sunday, showed a consecutive increase in three consecutive quarters of this year with N2.28 trillion shared to the tiers of government in Q3 of 2018.
A breakdown shows that the Federal government received the highest sum of N904.8 billion, followed by states, which received N718.5 billion and Local governments (LGs) receiving the lowest disbursements of N432.1 billion.
A further breakdown of the disbursed sums for 2016, 2017 and 2018 shows that the disbursements in the third quarter of 2018 (N2.28 trillion) were 31 percent and 18 percent higher than disbursements in the third quarters of the last two years.
According to the review, the last time total disbursements exceeded the N2.5 trillion mark was in the second quarter of 2014 (N2.510 trillion).
However, NEITI advised that the “increase in disbursements is a ground for cautious optimism” in the fiscal positions of all tiers of government, noting that the upswings and downswings pattern is reflective of the volatile nature of revenue resulting from reliance on primary commodity exports.
The publication also observed that while increase in revenue will reflect positively on the fiscal situation of the federating units, states will still have to struggle to finance their budgets considering their poor Internally Generated Revenue (IGR).
“There is virtually none of the states that can adequately finance their budgets from IGR and FAAC disbursements. States will have to resort to different levels of borrowing”, the review noted.
The NEITI Quarterly Review, designed to provide timely information and data, is a tool to support citizens’ engagement, advocacy, constructive debate, information sharing and enlightenment in tracking the utilization of public funds for purposes of development.
NEITI’s interest in FAAC disbursements and the statutory recipients is in view of the fact that more than 50percent of the funds are derived from the extractive industry.