The Nigeria Extractive Industries Transparency Initiative (NEITI) has said in its Quarterly Review that federal, state, and local governments in Nigeria received a total of N3.473 trillion in the second quarter of 2024.
The figure represents a 1.42 per cent increase, equivalent to N46.77 billion, from the N3.426 trillion disbursed in the first quarter of the year.
NEITI disclosed this in a statement signed by its assistant director, communications and stakeholders’ management Mr Chris Ochonu.
The statement attributed the increase in to steady revenue inflows into the Federation Account from various sources.
Presenting the report in Abuja, NEITI’s executive secretary, Mr Ogbonnaya Orji, said: “Our Quarterly Review aims to shed light on the revenue sources for the Federation Account and identify the factors influencing these figures over time.
“The objective is to enhance awareness and foster transparency in the management of public resources.”
He called on civil society organisations to step up their efforts in tracking government expenditures and monitoring allocations across all government tiers.
Breakdown
The report stated that the federal government received N1.102 trillion, representing 33.35% of the total allocation; the 36 states received N1.337 trillion (40.47%) while the 774 local government councils shared N864.98 billion (26.18%).
A comparison with the previous quarter showed that the federal government’s allocation decreased by N41.44 billion (3.76%), while state governments saw an increase of N58.13 billion (4.29%), and local government councils experienced a rise of N30.82 billion (3.57%).
Derivation Revenue
The nine oil-bearing states received N169.26 billion as their 13% derivation share from mineral revenue with Delta State leading at 40.153%, followed by Bayelsa (38.112%) and Akwa Ibom (36.117%). Rivers State recorded a derivation ratio of 27.272%, while the other oil-producing states had ratios below 20%.
The report also noted that solid minerals-producing states did not receive derivation revenue in Q2 2024 due to insufficient revenue generation from the sector.
Debt Deductions
Bauchi State recorded the highest debt deductions in Q2 2024 at N6.49 billion, followed by Ogun State. Anambra State had the least deductions at N115.6 million, while Lagos and Nasarawa recorded no debt deductions for the quarter.
State-by-state allocations
The report disclosed that Delta State received the largest share of allocations in Q2 2024, with a gross allocation of N137.357 billion, including oil derivation. Lagos State followed with N123.282 billion, and Rivers State came in third with N108.104 billion. Nasarawa, Ebonyi, and Ekiti States received the least, with N24.735 billion and N25.404 billion, respectively.
Local government allocations
Among local governments, Alimosho in Lagos State received the highest allocation at N5.721 billion, followed by Ajeromi/Ifelodun (N4.592 billion) and Kosofe (N4.541 billion). Ifedayo received the smallest share of N661.82 million.
Contributors
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), and the Nigeria Customs Service (NCS) were identified as the main revenue-generating agencies for the federation account.
Their contributions included oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import and excise duties.
The report highlighted an upward trend in revenue allocations in the latter months of 2023 and early 2024. Total monthly disbursements increased from N1.094 trillion in January 2024 to N1.098 trillion in February but dipped slightly to N1.065 trillion in March.
Recommendations
In its recommendations, NEITI urged states to explore the ongoing reforms in the solid minerals sector as a potential avenue to diversify revenue sources.
The report also called on the Central Bank of Nigeria (CBN) to strengthen measures to stabilise the exchange rate, with the aim of curbing fluctuations in Federation Account remittances.
In addition, NEITI advised states to adopt more realistic budget benchmarks for oil production and exports to mitigate the risks associated with volatile global prices.
It further charged the Revenue Mobilisation Allocation and Fiscal Commission (RMFAC) and the office of the accountant general of the federation (OAGF) to enhance transparency, particularly regarding payments of derivation arrears and debt repayment refunds.
With BusinessDay and Premium Times reports
