FG, states, LGAs shared N3.8tn in 6 months

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The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday released data showing that the Federation Accounts Allocation Committee (FAAC) shared N3.879 trillion among the federal, states, and local government areas between January and June 2020.

The organisation said in a statement by its director of communications and advocacy, Dr. Ogbonnaya Orji that the federal government got N1.53 trillion while the 36 states and the 774 local government areas received N1.29 trillion and N771.34 billion respectively.

The breakdown also showed that delta, Akwa Ibom, Rivers and Bayelsa states were the highest receiving states with a combined total of N321.29 billion, higher than the combined total net disbursements of N314.08 billion to 16 states.

NEITI further stated that the N1.53 trillion received by the federal government in the first half of 2020 was 4.28 per cent lower than the N1.599 trillion it got in the first half of 2019 and 7.36 per cent lower than the N1.652 trillion it received in the first half of 2018.

The situation, according to the organisation was the same in the states and local governments.

NEITI said a total of N1.298 trillion disbursed to the states in the first half of the year was 2.8 per cent lower than the N1.35 trillion disbursed in the first half of 2019 or 5.6 per cent lower than the N1.375 trillion disbursed in the first half of 2018.

For the local government areas, the report said the 2020 first half disbursements were 2.64 per cent and 3.04 per cent lower than the corresponding disbursements for 2019 and 2018 respectively.

However, it noted that disbursements in Q2 2020 were 1.09 per cent higher than the total disbursements in Q2 2019 and 3.66 per cent 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,” NEITI stated.

The report said the total FAAC disbursements in the second quarter of 2020 were lower than the N1.945 trillion disbursed in the first quarter of 2020, noting that it aligned with the projections made in the previous issue of the review, which projected lower FAAC disbursement in the second quarter.

NEITI report attributed the 0.55 per cent 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 CBN from N307/$1 to N360/$1 in March resulting in higher naira disbursements.”

NEITI said FAAC disbursements in the first quarter and the second quarter of 2020 were very volatile, with the difference in total disbursements between months ranging between N58.9 billion and N199.3 billion.

“During this period, the disbursements were very volatile in the first half of 2020, compared to 2018 and 2019. Unlike 2018 and 2019 where aggregate disbursements increased and decreased in successive months, in 2020 they fell for two straight months, increased in one month, and then decreased for two straight months,” the report stated.

It added 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. These figures indicate differences of N68.9 billion between January and February, N65.7 billion between February and March, N199.3 billion between March and April, N174.7 billion between April and May, and N58.9 billion between May and June.

“For comparison, the highest inter-month difference in the first half of 2018 was N62.9 billion, while the corresponding figure for 2019 was N63.5 billion. Thus, there have been very wide fluctuations in aggregate disbursements so far in 2020,” it noted.

NEITI added that from January to May 2020, actual government revenue was N1.62 trillion, representing 62 per cent of the expected pro-rata revenue of N2.62 trillion from the revised budget.

“That also explained a shortfall of 38 per cent 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,” it stated.

On total net FAAC disbursements and deductions for states for the first half of 2020, NEITI said it observed wide disparities.

“For instance, Osun State had the lowest net disbursement of N13.13 billion, while Delta State had the highest net disbursement of N100.81 billion. This implies that Delta State received seven times the disbursement that Osun State received,” it said.

The report also stated that the total net disbursements received by Delta State (N100.81 billion) was higher than the combined total net disbursements of N99.47 billion received by Osun, Cross River, Plateau, Ogun, Gombe and Ekiti states.

Also, it stated that the combined total net disbursements of N321.29 billion received by the four highest receiving states of Delta, Akwa Ibom, Rivers and Bayelsa were higher than the combined total net disbursements of N314.08 billion received by 16 states.

NEITI listed the 16 states as Osun, Cross River, Plateau, Ogun, Gombe, Ekiti, Zamfara, Kwara, Nasarawa, Ebonyi, Taraba, Benue, Adamawa, Ondo, Bauchi and Abia.

Lagos State, however, has the highest deductions while Yobe State has the lowest.

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