OrderPaperToday – The Nigeria Extractive Industries Transparency Initiative, NEITI, has revealed that the sum of N8.15 trillion was shared between the federal, states, local governments and other statutory recipients by the Federation Accounts and Allocation Committee (FAAC) in 2019.
A quarterly review released by the agency in Abuja showed that the federal government received N3.37 trillion, representing 41.4% of total disbursements; the 36 states got N2.761 trillion (33.9%) while the 774 local governments shared N1.649 trillion (20.2%).
The review is one of NEITI’s policy and advocacy instruments intended to provide timely information and data that could be used to support citizens’ engagement, advocacy, information sharing and enlightenment in the tracking of the use of extractive revenue for development purposes.
According to the publication, the disbursements are N377 billion or 4.42% lower than the 2018 figure of N8.524trillion, but N1.728trillion or 26.92% higher than the total N6.419trillion disbursed in 2017.
A further 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.
The NEITI quarterly review added, “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.”
In addition, the report noted that over the seven-year period (2013 – 2019), 2013 recorded the highest disbursements of N9.742 trillion, followed by 2014 (N8.595trillion). 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 review observed the volatile nature of government revenue in Nigeria owing to high fluctuations in oil prices while indicating the wide disparity between net disbursements received by states.
According to the report, Osun and Cross River states have the lowest allocation of N24.14billion and N36.22Billion. Delta State received the highest disbursement of N218.58 billion.
“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,” the report stated.
Further breakdown of the figures showed that 3 states received less than N40 billion, nine states received between 40 billion-49 billion while fourteen states received between 50 billion-59 billion respectively. Four states: Borno, Katsina, Edo and Kaduna got between 60-69billion 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 N100billion from FAAC allocations owing to the effects of 13% derivation.
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.
“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,” the review noted.
On budget financing, the publication stated: “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 fulfil this purpose.
“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.”
Some positive projections for 2020 were also made in the review after comparing crude oil prices between January 2015 and December 2019: The available data to NEITI for the first month of 2020 indicated an average oil price of $58.6 per barrel as against the $56.9 in 2019 and $64.9 per barrel price of 2018. This suggests that oil prices in 2020 have experienced slight increase over the 2019 figures.
The report concluded that with increased efforts and collaboration between Organisation of Petroleum Exporting Countries (OPEC) and other major oil producers to stem falling oil prices, it is hoped that oil prices will not fall further, and this will result in increased revenue for the Federation, and ultimately boost FAAC disbursements in 2020.
In a press statement, NEITI said the publication of the quarterly review is in line with its mandate of ensuring transparency and accountability in the utilisation of extractive revenues by government to improve quality of lives and reduce poverty in the country.