FG, states, LGs shared N8.15trn in 2019 – NEITI

  • Osun, Cross River get lowest disbursements 
  • Report: 21 states can’t service recurrent expenditure

The three tiers of government – federal, states and local councils – and other statutory recipients shared N8.15 trillion distributed by the Federation Accounts and Allocation Committee (FAAC) in 2019.

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

Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday made the disclosure in its quarterly review made available to newsmen in Abuja by the Director, Communications and Advocacy, Dr. Orji Ogbonnaya Orji.

It further noted that the figure was N377 billion or 4.42 per cent lower than the 2018 figure of N8.524 trillion.

NEITI, however, added that the figure was N1.728trillion or 26.92 per cent higher than the total disbursements of N6.419 trillion made in 2017.

The quarterly review, which compared disbursements made to the federal, states and local governments in 2019 while making projections for the year 2020, disclosed that revenue shared to the three tiers of government in the two previous years 2017 and 2018, followed the same pattern.

The report stated that: “For 2018, total disbursements to FG, states, and local governments were N3.483 trillion, N2.850 trillion, and N1.667 trillion, respectively. For 2017, disbursements were N2.563 trillion to FG, N1.859 trillion to states, and N1.502 trillion to local governments.

“A comparative analysis of the disbursements made by FAAC to the federation in 2019 as against the sharing in the two previous years of 2017 and 2018 shows that the total disbursements to the Federal Government in 2019 were 3.08% lower than the disbursements in 2018, but 31.69% higher than those in 2017.

“Also, while the disbursements to the states in 2019 were 3.12% lower than those in 2018, they were 48.54% higher than those in 2017. The scenario was the same for the local governments in 2019, as their disbursements were 1.08% lower than those in 2018, but 9.75% higher than what was recorded in 2017.”

A further comparison of total FAAC disbursements between 2013 and 2019 and revealed that: “The total disbursements fell in three consecutive years from 2013 to 2016. Thereafter, total disbursements increased until 2018. However, the increase in total disbursements stopped in 2019, as there was a decrease in 2019 over 2018 figures.

“Over the seven-year period (2013 – 2019), 2013 recorded the highest disbursements of N9.742 trillion, followed by 2014 (N8.595 trillion). Year 2018 came third with N8.524 trillion while 2019 had the fourth highest disbursements of N8.147 trillion.

“During the same period (2013-2019), 2019 witnessed the lowest percentage decline in disbursements (-4.42%) while 2018 had the highest percentage increase of 32.8%.”

“The report identified a general rising trend in FAAC disbursements from the beginning of the year till about August 2019 when disbursements either fell slightly or remained relatively stable.

These figures, the report noted, highlighted the volatile nature of government revenue in Nigeria owing to high fluctuations in oil prices.

A central feature of these figures was that disbursements were higher in the second half of 2019 than the first half.

The review, which disaggregated disbursements to the various tiers of government, showed a wide disparity between net disbursements received by states whereas Delta State received the highest disbursement of N218.58 billion, leaving Osun and Cross River states behind with the lowest allocation of N24.14 billion and N36.22 billion respectively.

“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.

“Three states received less than N40 billion, nine states received between N40 billion and N49 billion while 14 states received between N50 billion and N59 billion respectively. Four states: Borno, Katsina, Edo and Kaduna got between N60 billion and N69 billion and Kano State with N82.34 billion. Four states of the Niger Delta region plus Lagos were among the big league of states that received over N100 billion from FAAC allocations,” the report stated.

The report noted that this is owed largely to the effects of 13% derivation for oil producing states.

On the deductions from states’ allocations, the NEITI Quarterly 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. However, deductions for most states (22 of them) were below N10 billion.”

Another significant issue highlighted by the NEITI 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 fulfill this purpose.

“The report 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,” Orji added.

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