The Nigeria Extractive Industries Transparency Initiative (NEITI) has said in its quarterly review that revenue disbursements by the Federation Account Allocation Committee (FAAC) to the three tiers of Nigeria’s government witnessed a steady increase in three consecutive quarters of 2018 with N2.28 trillion shared in Q3.
NEITI said in a statement issued yesterday and signed by its director of communications, Dr. Orji Ogbonnaya that the federal government received the highest sum of N904.8 billion while states and local governments got N718.5 and N432.1 billion respectively during the period.
“Total FAAC disbursements in the third quarter of 2018 amounted to N2.28 trillion representing a 17.6 per cent increase over the N1.938 trillion disbursed in the first quarter of 2018 and 13.5 per cent higher than the N2.008 trillion disbursed in the second quarter,” said Ogbonnaya.
The report also noted that with the exception of July, the lowest amount disbursed so far in 2018 is higher than disbursements in all other months in 2016 and 2017.
A breakdown of the disbursed sums for 2016, 2017 and 2018 showed that the disbursement in the third quarter of 2018 (N2.28 trillion) was 31 per cent and 18 per cent higher than disbursements in the third quarters of the last two years.
Besides, Ogbonnaya said the last time total FAAC disbursements exceeded the N2.5 trillion mark was in Q2 of 2014 when N2.510 trillion was disbursed.
NEITI explained that the federal government’s receipt of N904.8 billion in the Q3 2018 was 11.3 per cent and 7.8 per cent higher than the amounts received in the first and second quarters of 2018, which were N812.8 billion and N839.5 billion respectively.
“The amount disbursed to states represented an increase of 5.1 per cent over the N683.5 billion disbursed in the first quarter, and an increase of 3.8 per cent over the N692.1 billion disbursed in the second quarter. For local government councils, the amount received was 9.8 per cent and 7.5 per cent higher than the respective amounts of N393.4 billion and N402.1 billion received in the first and second quarters.”
On a year-by-year analysis, NEITI revealed that the increase in the third quarter disbursements to states in 2018 were the highest when compared to 2016 and 2017 figures disbursed to other federating units.
“Total disbursements to states in the third quarter of 2018 came to N718.5 billion, representing a growth of 40.1 per cent and 22.5 per cent over disbursements in the third quarters of 2016 (N512.7 billion) and 2017 (N586.6 billion) respectively.
“For the local government councils, disbursements in 2018, Q3 totalled N432.1 billion. This figure was 33.2 per cent higher than the N324.3 billion disbursed in 2016, Q3, and 18.7 per cent higher than the N324.3 billion disbursed in 2017, Q3.
“Total disbursements to the FGN in the third quarters of 2016, 2017 and 2018 were respectively, N697.9 billion, N752.7 billion, and N904.8 billion indicating that in 2018, Q3, the FGN received 29.7 per cent higher disbursements than 2016, Q3, and 20.2 per cent higher disbursements than 2017 Q3.”
NEITI further said the total net FAAC disbursements to states between January and September 2018 ranged between N16.41 and N150.59 billion, with Osun and Delta States receiving the lowest and highest amounts respectively.
It explained that states that received the highest allocations of N100 billion and above were all in the Niger Delta region and this was on account of the 13 per cent derivation framework.
NEITI also observed that while increase in revenue will reflect positively on the fiscal situation of the federating units, states would still have to struggle to finance their budgets considering their poor internally generated revenue.