Nigeria/EITI

N3.879trn Disbursed By FAAC To FG, States, Others In First Half 2020

FAAC nigeria

The Federation Accounts Allocation Committee (FAAC) shared a total of N3.879 trillion to the Federal Government, states, local government areas and other statutory recipients in the first half of 2020 e360 has learnt.

A breakdown of the disbursements showed that N1.53 trillion went to the Federal Government, while the states got N1.29 trillion and the 774 local government areas received N771.34 billion

The information is contained in the latest edition of the quarterly review of the Nigeria Extractive Industries Transparency Initiative (NEITI) released Tuesday, in Abuja.

According to the report, the N1.53trillion received by the FG in H1 2020 was 4.28percent lower than the N1.599 trillion it got in the first half of 2019 and 7.36percent lower than the N1.652 trillion it received in the first half of 2018.

For the states, a total of N1.298 trillion was disbursed in the first half of 2020, which is 2.8percent lower than the N1.35 trillion disbursed in the first half of 2019, and 5.6percent lower than the N1.375 trillion disbursed in the first half of 2020, the report showed.

Similarly, the 2020 first half disbursements to local government areas were 2.64percent and 3.04percent lower than the corresponding disbursements for 2019 and 2018 respectively.

The report however notes that disbursements in Q2 2020 were 1.09percent higher than total disbursements in Q2 2019 and 3.66percent lower than the one for Q2 2018.

FAAC disbursements in the second quarter of 2020 stood at N1.934 trillion. This was made up of N739.2 billion to the Federal Government, N629.3 billion to state governments, and N375.4 billion to the 774 local government areas.

The report pointed out that the total FAAC disbursements in the second quarter of 2020 was slightly lower than the N1.945 trillion disbursed in the first quarter of 2020.

The NEITI report attributed the 0.55% decrease in Q2 2020 to a couple of factors, namely; rebound in oil prices in the second quarter as a result of ease of lockdowns by countries across the world and the adjustment of the official exchange rate by the CBN from N307/$1 to N360/$1 in March resulting in higher naira disbursements.

The report also revealed that FAAC disbursements in the first quarter and second quarter of 2020 were very volatile, with the difference in total disbursements between months ranging between N58.9 billion and N199.3 billion.

The report also observed that in the months under consideration, aggregate disbursements fluctuated by large amounts, compared to 2018 and 2019. “Aggregate disbursements were N716.3 billion in January and this fell to N647.4 billion in February. Thereafter, disbursements fell to N581.6 billion in March, before increasing to N780.9 billion in April, disbursements then fell to N606.2 billion in May and to N547.3 billion in June.”

NEITI also disclosed that from January to May 2020, actual government revenue was N1.62 trillion, representing “62% of the expected pro-rata revenue of N2.62 trillion from the revised budget”. That also explained a shortfall of 38percent in government revenue for the first five months of the year.

As oil prices continue to rise, and with the increased pace of economic activities, NEITI projects that government revenue will perform better in the second half of 2020, with the possibility of shortfalls in revenue compared to budgeted figures.

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