NEITI: Federal, States, LGs Shared N10.143trn In 2023
By Juliet Ukanwosu
The latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) on the Federation Account revenue allocations for the year 2023 has shown that the three tiers of government- the Federal, States and Local government shared the total sum of N10.143 trillion from the Federation Account as statutory revenue allocations in 2023.
The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, who announced the release of the report in Abuja on Tuesday, said that the agency embarked on the NEITI FAAC Quarterly Review to enhance public understanding of Federation Account allocations and disbursements as published by government. He explained that “The ultimate objective of this disclosure is to strengthen knowledge, awareness and promote public accountability of all institutions in public finance management”.
A breakdown of the revenue receipts showed that the federal government received N3.99trillion, representing 39.37% of the total allocation. The 36 states got N3.585 trillion representing 35.34% while the 774 local government councils of the Federation shared 2.56 trillion equivalent to 25.28%.
A further analysis of the N10.143trillion disbursements in 2023 showed an increase of N1.934 trillion or 23.56% when compared to the disbursement of N8.209 trillion shared in the corresponding year 2022. The Review attributed the increase to improved revenue remittances to the Federation Account due to the removal of petrol subsidy and the floating of the exchange rate by the current administration.
The report highlighted that while total revenues distributed from the Federation Account recorded an overall increase of 23.56% in 2023, the increase accruing to each tier of government varied, largely due to the type of the revenue streams contributing to the inflows into the Federation Account.
The Quarterly Review disclosed that the federal, states and local governments cumulatively received N1.934 trillion more than the amount shared in 2022. The first quarter of 2023 increased by N579.71billion (33.19%) when compared to the first quarter of 2022. The second quarter increased 10.32%, third quarter by 27.49% while the fourth quarter had an increase of 23.42% respectively.
The Federal Government’s share increased by N574.21 billion (16.79%) from the N3.42trillion it received in 2022 to N3.99 trillion in 2023. The State governments shared N3.59 trillion in 2023 compared to the N2.76 trillion they got in 2022, showing an increase of 29.99%. Similarly, local government councils’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in the 2023 which amounts to a 26.22% increase.
A disaggregated breakdown of State by state share of the allocations showed that Delta State received the largest share of N402.26 billion, followed by Rivers State which received N398.53 billion and Akwa-Ibom State which received the third largest allocation of N293.58 billion. Nasarawa, Ebonyi and Ekiti States received the least amounts of N73.32 billion, N73.91 billion and N74.04 billion respectively.
It further showed that nine oil producing states received the 13% derivation revenue allocated to mineral producing states from the proceeds from mineral revenue. The derivation revenue remains a significant portion of revenue for oil producing states.
However, the report noted that solid minerals producing states did not receive derivation revenues during the last quarter of last year because of the need to allow the revenues to accumulate over a period of time before sharing can occur.
According to the report, the main sources of revenue inflows to the Federation Account in 2023 were the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS), through earnings from the different revenue stream. This included oil, gas royalties, petroleum profit tax, company income tax, value added tax, import and excise duties.
The Report also revealed that revenue from solid minerals sector is very negligible, and reflects the under-performance of the sector.
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