By Chineme Okafor in Abuja
Revenue disbursements by the Federation Account Allocation Committee (FAAC) to the three tiers of Nigeria’s government has witnessed a steady increase in three consecutive quarters of this year with N2.28 trillion shared in the third quarter (Q3) of 2018, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed.
NEITI, in a statement issued yesterday, said out of this sum, the federal government received the highest of N904.8 billion, followed by states, which received N718.5 billion and then local governments which got the lowest disbursements of N432.1 billion within the period.
The statement, which was signed by the Director of Communications of NEITI, Dr. Orji Ogbonnaya, explained the information was contained in the latest edition of its Quarterly Review.
“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 the statement.
It further noted, “It is interesting 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.”
The NEITI also stated that the last time total FAAC disbursements exceeded the N2.5 trillion mark was in the second quarter of 2014, when N2.510 trillion was disbursed.
NEITI explained that the federal government’s receipt of N904.8 billion in the third quarter of 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.
It stated, “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 LGCs, 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.
According to NEITI, “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 LGCs, 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.”
According to it, the total net FAAC disbursements to states in the first nine months of 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 (IGR).
It explained, “There is virtually none of the states that can adequately finance their budgets from IGR and FAAC disbursements. States will have to resort to different levels of borrowing.”