Nigeria/EITI

NEITI: FAAC Disbursed N8.5trn To Tiers Of Govt In 2018

… Osun lowest with N22.8b, Delta highest with N213.6b

 

The Federation Allocation Account Committee (FAAC) disbursed N8.5 trillion to the three tiers of government in 2018, a report has shown.

This is the first time since 2014, that disbursements would exceed N2 trillion in three consecutive quarters, according to the latest edition of NEITI Quarterly Review which analysed disbursements from FAAC in 2018.

The total of N8.52 trillion shared among the three tiers of government in 2018 represents 32.8percent increase when compared to N6.418 trillion disbursed in 2017 and 67.1percent higher than N5.1 trillion shared in 2016.

A further breakdown of the FAAC disbursements showed that the federal government received N3.483 trillion in 2018 representing 41percent while the 36 States received the sum of N2.85 trillion, representing 33.4percent and the 774 local governments got N1.667 trillion, representing 19.6percent.

The Nigeria Extractive Industries Transparency Initiative publication observed that government revenues have continued to be on the increase since 2017. “The rebound in federation revenue continued as a result of increases in both oil and non-oil revenue,” the review stated.

A quarterly breakdown of disbursements in 2018 showed a steady increase in the amount disbursed throughout the year. For instance, in the first quarter (Q1) of the year, FAAC shared N1.938 trillion, while N2.008 trillion was disbursed in the Q2. Disbursements in Q3 and Q4 were N2.278 trillion and N2.299 trillion respectively.

Nigerian President Muhammadu Buhari

The review disclosed that “there were three consecutive quarters in 2018 when total disbursements exceeded N2 trillion,” observing that the last time this happened was in the third quarter of 2014.

The publication also stated that: “with the exception of the third quarter of 2017, the N2.299 trillion disbursed in the fourth quarter of 2018 was the highest quarterly disbursement since the second quarter of 2014”.

On the states’ share of the FAAC disbursements, the review disclosed that five states received higher than N100 billion each in 2018. The States were Lagos (N119 billion), Bayelsa (N153.1 billion), Rivers (N172.6 billion), Akwa Ibom (N202.4 billion) and Delta (N213.6 billion).

The publication further disclosed that twenty-three states received less than N60 billion each as total FAAC receipts in 2018. A break down shows that Cross River, Ekiti and Ogun states received N37 billion, N39.3 billion and N39.6 billion respectively. Eight states namely: Zamfara, Gombe, Plateau, Kwara, Ebonyi, Nasarawa, Taraba, and Adamawa, received between N40 billion and N49.9 billion.

Also, twelve states namely; Yobe, Enugu, Kogi, Bauchi, Imo, Sokoto, Kebbi, Anambra, Abia, Benue, Niger and Oyo received between N50 billion and N59.9 billion.

Waziri Adio, Executive Secretary NEITI

In addition, six states namely; Jigawa, Katsina, Borno, Ondo, Kaduna, and Edo, received between N60 billion and N69.9 billion, while Kano received a total of N84.2 billion in the year under review.

The review revealed wide disparity in the disbursements to states with Osun State receiving the lowest net allocation of N22.8billion while Delta State received the highest net allocation of N213.6 billion, ‘‘meaning net disbursement to Delta State was 935Percent of Osun States’,” the review added.

The publication however noted with concern that despite the upward trajectory in FAAC disbursements to the three tiers of government, the disbursements were inadequate to meet states’ budgetary requirements.
“Clearly, there was no state that could adequately finance its budget solely from FAAC disbursements. There were three states where FAAC disbursements were more than 50percent of their budgets, these are Delta, Enugu, Yobe. For all other states, disbursements were less than 50percent of their budgets,” publication noted.

On internally generated revenues (IGR), the NEITI review further remarked that it was highly unlikely that IGR would be able to make up for the shortfall in FAAC disbursements to states.
From the review, only four states (Cross River, Lagos, Ogun and Rivers) had estimated IGR that was more than 50percent of their FAAC allocations. Out of these states, only Lagos and Ogun had IGR that was actually higher than their FAAC allocations.

The NEITI review further revealed that estimated IGR in six states (Enugu, Kaduna, Kano, Kwara, Osun, Oyo) was more than 40percent of their FAAC allocations.
The review further noted that for these 10 states, there is a probability that actual IGR may be sufficient to address the budgetary gaps in FAAC disbursements.

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