FG, states, LGs shared N4.37 trillion FAAC allocations in six months - NEITI

The federal, state and local governments between January and June 2023, shared N4.37 trillion from the federation account as statutory revenue allocations.


This is contained in the latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) on the federation account revenue allocations for the first half of the year.

NEITI executive secretary Orji Ogbonnanya Orji, who announced the report on Thursday in Abuja, said total distributable FAAC allocations to the three tiers of government in the first and second quarters of 2023 stood at N2.32 trillion and N2.04 trillion, respectively.

The NEITI quarterly review revealed that inflows into the federation account in Q2 of 2023 declined by 23 per cent, affecting the distributable revenue, which fell by 12 per cent compared with the total revenue disbursed in the first quarter.

“Each tier of government received more than N1 trillion over the six-month period,” Mr Orji said.

The report showed that a breakdown of the revenue receipts showed that the federal government received about N1.78 trillion, or 40.7 per cent, while the State governments received N1.5 trillion, or 34.5 per cent. Local councils received N1.08 trillion or 24.8 per cent of the total distributable revenue.

A comparative analysis of the total allocations on a year-on-year basis in the corresponding quarters of 2022 and 2023 showed that the distributable revenue of N4.366 trillion shared was higher by 16.7 per cent from about N4.05 trillion in 2022.

Consequently, it revealed that the allocation received by the federal government over the period under review increased by 19.8 per cent to N1.78 trillion in 2023 from N1.48 trillion in the corresponding period in 2022.

Similarly, the report noted allocations to the State governments grew by about 11.2 per cent to N1.42 trillion in 2023 from N1.26 trillion in 2022, while allocations to the LGs rose by 16.8 per cent to N1.08 trillion in 2023, from N926 billion in 2022.

The increase in half-yearly allocations in 2023 was consistent with an upward trend from the previous period, where the distributable revenue for the first half of the year rose by 16.7 per cent, from N3.47 trillion between January and June 2021 to N4.05 trillion in the corresponding period in 2022.

Also, allocations to the federal, state and local governments increased by 8.8 per cent, 26.5 per cent and 14.2 per cent respectively. However, compared to the same period in 2022, the report showed that FAAC distribution in Q2 declined in absolute value, with total distributable revenue of N2.02 trillion less by 13 per cent than about N2.16 trillion distributed in the second quarter of 2022.

Further analysis of the disbursements to the states showed that Delta received the highest allocation of N102.79 billion in the second quarter of 2023, followed by Akwa Ibom’s N70.01 billion, Rivers’s N69.73 billion, Lagos’ N60.64 billion and Bayelsa’s N56.34 billion.

The total disbursements to these five states (N359.5 billion), or 35.9 per cent of the total FAAC allocations, was more than the total allocations to the next 15 states (N349.3 billion).

The cumulative allocation to the five states was also more than the share of allocation to 19 other states put together, adding that the bottom 10 states received 17.3 per cent of the revenue shared in the second quarter of 2023.

Nasarawa, Ebonyi, Ekiti, Gombe and Taraba received the lowest allocations of N16.71 billion, N16.84 billion, N16.95 billion, N17.22 billion and N17.45 billion, respectively. Four of the five states with the highest allocations, except Lagos, received a significant share of 13 per cent derivation revenue allocated to oil-producing states.

The total disbursements to these five states (N359.5 billion), or 35.9 per cent of the total FAAC allocations, was more than the total allocations to the next 15 states (N349.3 billion), while the cumulative allocation to the five states was also more than the share of allocation to 19 other states.

The bottom 10 states received 17.3 per cent of the revenue shared in the second quarter of 2023. 

The bulk of the revenues to the federation account came from remittances from the three main revenue-generating agencies, including the Nigeria Upstream Petroleum Regulatory Commission, the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS), said the report.

 “Also, revenue remittances of about N1.84 trillion in Q2 2023 came from mineral and non-mineral sources, comprising N809 billion, or 44 per cent from mineral revenue (mostly oil and gas) and N1.03 trillion, or 56 per cent from non-mineral sources,” stated the report.

It added, “In terms of debt service obligations and the impacts on states’ net allocations, the report showed that Lagos topped the list of 36 states with a total deduction of N9.03 billion in the second quarter of 2023, followed by Delta (N6.76 billion), Ogun (N6.10 billion), Kaduna (N5.63 billion), Osun (N5.60 billion and Imo (N5.51 billion).

“Jigawa, Anambra, Nassarawa, Kebbi and Enugu states had the lowest deductions of N1.16 billion, N1.29 billion, N1.45 billion, N1.51 billion and N1.88 billion, respectively. The nine oil-producing states, according to the report, namely Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers states, received allocations relative to their share of the oil and gas as well as other minerals extracted from their domains.”
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