‘Akwa Ibom tops FAAC Allocation with N116.6 billion in 2016’

Akwa Ibom state received the highest allocation of N116.6 billion from the federation account in 2016.

This was followed by Lagos and Rivers States with N109.3 billion and 103.98 billion respectively.

This information and data were contained in the latest NEITI Quarterly Review of the Federation Accounts Allocation Committee “FAAC which tracked and analyzed the disbursements during the period.

The NEITI FAAC Quarterly which is third in the series by NEITI examined detailed breakdown and analysis of disbursements from the federation account to the three tiers of government. It also looked the internally generated revenues of the states in 2016.

Although, no reason was clearly given for the highest allocation received by Akwa Ibom, analysts suggest that it may not be unconnected with the vantage sharing position of the state under the   13% derivation principles.

From the NEITI Review, Kwara and Ebonyi states received the least federal allocations of N30.08 billion and 30.09 billion respectively when compared with receipts from the 36 States of the Federation.

On allocation to local governments, Lagos state topped the table with a total of N69.29 billion allocated to  the 20 local governments in the State while the 44 local governments in Kano State received a total of N56.16 billion also in 2016.

On disbursements to the federal government in 2016, the NEITI Quarterly Review disclosed the total FAAC allocation stood at N2.08trillion as against the N6.06 trillion budget for that year. This represents   about 34% of the budget. The implication could be linked to  the noticeable challenges by the FGN  to meet   recurrent expenditure needs estimated  at N2.6 trillion in 2016.

The NEITI FAAC Quarterly Review highlighted that payments to the three tiers of government have continued to decline by an average of 40% between  2013  and  2016. “The Federal Government received N3.711 trillion in 2013 and this fell by 43.9% to N2.08 trillion in 2016. Similarly, disbursements to State Governments totaled N3.095 trillion in 2013. In 2016, States received N1.642 trillion, which represents a 46.9% decline on the 2013 figures… Local Governments received total disbursements amounting to N1.011 trillion in 2016. This was 40.7% lower than the figure of N1.708 trillion they received in 2013”, the review pointed out.

Comparing the 2015 and 2016 figures, The NEITI special publication disclosed that the revenues disbursed by FAAC to the three tiers of government fell by 15% from N6.011 trillion in 2015 to N5.121 trillion in 2016.

Other striking features of the NEITI FAAC Quarterly Review were in the areas of internally generated revenue of  the federation, the rising  debt profiles and  the concern of Nigerians for State governments to lessen  dependence on federal allocations through creative means of developing capacity to shower up internally generated revenues.

“IGR is very low in most states and it is only in two states of Lagos and Ogun that the IGR is higher than FAAC allocations. Figures show that total revenue by itself cannot fund states budget”

The NEITI Review added that the revenues of all the states government fell drastically short of the budgets projections. The report cited some states like Lagos which had a budget of N662.60bn, but the total revenue that accrued to it was N410.5bn leaving a shortfall of about N252 billion, Adamawa State had a revenue of N41.05 billion against a budget of N130.10 billion while Nassarawa had a revenue of N32.5 billion to fund a budget of N77.30 billion.  It further states that some states such as Cross River, Sokoto, Borno, Jigawa, Osun and Plateau had total revenues in 2016 which were below 30% of their budgets.

The NEITI Review noted with concerns the debt profile of the States government were rapidly on the increase. The NEITI Quarterly Review showed that Lagos State had the highest debt of N603.25 billion as against the state’s revenue of N410.5bn for 2016.

This is followed by Delta State with N331.95 billion debt as against N142.77bn (142.28) of the state revenue. Osun and Akwa Ibom states took the third and fourth place on rising debt profile with N165.91 billion and N161.23billion respectively.

Yobe and Anambra States stood out clearly as States with the least debt burden. While Yobe was indebted to the tune of N11.74billion, Anambra States owes N20.60billion from the NEITI FACC Quarterly publication research and analysis.

On rising debt profile, the case of Osun, Cross River and Delta states raised major concerns giving the fact that their total borrowings were found by the NEITI publication to be more than double the total revenues accruing to the states. The Review maintained that “Considering that most states already have a high debt burden, the possibility of even higher debts for the states remain quite high”.

The NEITI Review however projected that government revenues will increase following upward movement in global oil prices. ‘’Oil production which was down from January to August 2016, have started rising. There has been a gradual rise in oil prices from $30.70 per barrel in 2016 to $54.58 per barrel in January 2017. If this trend continues,government revenue will likely increase and will improve the ability of both Federal and State governments to fund their budgets”.

The NEITI FAAC Quarterly Review is specially dedicated to tracking the disbursements by the Federation Accounts Allocation Committee to the three tiers of government.

Dr. Orji Ogbonnaya Orji,

Director, Communications

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