Data released by the Nigeria Extractive Industries Transparency Initiative (NEITI) showed that the federal, state and local governments shared N10.14 trillion from the federation account in 2023.
The executive secretary of NEITI, Dr Orji Ogbonnaya Orji, said this in a report on the federation account revenue allocations for the year 2023 released in Abuja on yesterday.
Orji said the NEITI FAAC Quarterly Review was carried out to enhance public understanding of Federation Account allocations and disbursements as published by government.
According to the report, state by state share of the allocations showed that Delta State received the lion’s share of N402.26 billion (gross), inclusive its share of oil and gas derivation revenue.
It was followed by Rivers State which received N398.53 billion while Akwa-Ibom State came third with N293.58 billion, all inclusive of their respective oil and gas derivation revenue.
Nasarawa State, according to NEITI received the least amount of N73.32 billion, while Ebonyi and Ekiti states received N73.91 billion and N74.04 billion respectively.
On the share of 13 per cent derivation revenue, NEITI said nine states received the 13 percent allocated to mineral producing states from proceeds of mineral revenue.
“The derivation revenue remains a significant portion of revenue for states like Delta, Akwa Ibom, Anambra and Rivers states.
“Also, the derivation revenues of states such as Delta, Akwa Ibom, and Bayelsa, which were 161.47 percent, 141.25 percent and 127.89 percent respectively, eclipsed their statutory revenues.
“Rivers State’s derivation revenue was 74.15 percent during the period. Notably, the other five oil producing states recorded lesser derivation revenue compared to the four above.
“For example, Ondo State had 27.71 per cent, Edo had 30.04 percent, while Abia, Anambra and Imo recorded derivation revenue of about 20 percent or less,” he said.
The NEITI 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.
On direct deductions from state, Delta State recorded by far the largest debt deductions in 2023.
With total deduction of N12.97 billion, Delta’s debt deduction was more than the deductions for Bauchi State, the second largest in 2023 by N282 million. Lagos State recorded the least cumulative debt deductions amounting to N370 million.
The report stated that the reduced debt burden was attributable more to the increase in the size of federation account allocations than a reduction in the size of debt.
A breakdown of the revenue receipts showed that the federal government received N3.99 trillion, representing 39.37 percent of the total allocation.
He added that the 36 states got N3.585 trillion representing 35.34 percent while the 774 local government councils shared N2.56 trillion, equivalent to 25.28 per cent.
“A further analysis of the N10.143 trillion disbursements in 2023 showed an increase of N1.934 trillion or 23.56 percent when compared to the disbursement of N8.209 trillion shared in 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 new administration.
“The report highlighted that while total revenues distributed from the account recorded an increase of 23.56 percent in 2023, the increase accruing to each tier of government varied due to the type of the revenue streams contributing to the inflows into the Federation Account,” he said.
The executive secretary said the NEITI Quarterly Review of 2023 FAAC allocations revealed that the federal, state and local governments cumulatively received N1.934 trillion more than the amount shared in 2022.
He said allocation for the first quarter of 2023 increased by N579.71billion (33.19 percent) when compared to the first quarter of 2022, while the second, third and fourth quarters increased by 10.32 percent, 27.49 percent and 23.42 percent respectively.
“The federal government’s share increased by N574.21 billion (16.79 percent) from the N3.42 trillion 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 per cent.
“Similarly, local government councils’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in 2022, which amounts to a 26.22 per cent increase, while total distributed revenue from the Federation account recorded an increase of 23.56 percent in 2023,” he said.
He explained that the increase that accrued to each tier of government varied, largely due to the type of revenue item that contributed to the inflows into the federation account.
“In the same period (2023), states and local governments recorded increases in their allocations of 29.99 percent and 26.22 percent respectively.
“The increase in allocation to the Federal Government, however, was 16.79 per cent,” he said.
On the whole, NEITI said the removal of subsidy on petrol shored up the statutory revenue.
Recall that President Bola Tinubu had on May 29, 2023 declared that “petrol subsidy is gone.”
The presidential statement pushed the price of petrol from N198/litre to N660 and N700/litre.
