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FG, states, others shared N8.15tr in 2019 – NEITI

Nigeria Extractive Industries Transparency Initiative (NEITI)
Nigeria Extractive Industries Transparency Initiative (NEITI)

Nigeria Extractive Industries Transparency Initiative NEITI) on Thursday reported that the three tiers of government shared the sum of N8.15 trillion from the Federation Account distributions in 2019.

The transparency organisation disclosed this in its latest edition of its industry Quarterly Review report.

Details of the disbursements provided  through a statement by NEITI’s Director, Communications & Advocacy, Dr. Orji Ogbonnaya Orji, showed that this figure is N377 billion or 4.42 per cent lower than the N8.524 trillion shared by the tiers of government in 2018, but N1.728 trillion or 26.92 per cent higher than the total disbursements of N6.419tr made in 2017.

Out of this amount, the Federal Government received N3.37tr, representing 41.4 per cent of total disbursements; the 36 states got N2.761tr (33.9%) while the 774 local governments shared N1.649tr (20.2%) of the total disbursements.

From the publication, and in line with the revenue sharing formula, the FG received the highest disbursements from FAAC while local governments got the lowest.

The NEITI Quarterly Review showed a wide disparity between net disbursements received by states.

According to the report, Osun and Cross River states had the lowest allocation of N24.14billion and N36.22Billion. Delta State received the highest disbursement of N218.58 billion.

“Put differently, if we assume that the net disbursements received by both states were fairly constant, then, the amount received by Delta State in 2019 alone can be used to cover disbursements to Osun State in nine years”, the Report further explained.

On the deductions from states’ allocations, the NEITI report revealed that Yobe State had the lowest deductions of N2.16 billion while Lagos State had the highest deductions of N44.45 billion.

According to that Report, “It is striking that the two states with the lowest net disbursements (Osun and Cross River) had the highest deductions (N27.19 billion and N18.55 billion respectively) after Lagos State.”

Another significant issue highlighted by the Quarterly Review was the inadequacy of the net FAAC disbursements to cover the full budgets of all the states.

“The figures clearly indicated that no state was able to finance its total budget based on FAAC disbursements alone. These states would need Internally Generated Revenues (IGR) to fulfil this purpose”, the report stated.

It added that in 21 states of the federation, “Net FAAC disbursements alone could not service their recurrent expenditure.

The NEITI report also compared the total revenue accruable to each state of the federation to the states budgets and concluded that “Even with the addition of IGR to FAAC disbursements, no state can independently finance its budget. Thus, all states would be faced with the option of either not fully implementing their budgets or borrowing to achieve this”.

 

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