FAAC Distributes N3.473trn To FG, States, LGs In Q2 – NEITI The Federation Accounts Allocation Committee (FAAC) disbursed N3.473 trillion to the three tiers of government in the second quarter of 2024. This reflects an increase of N46.77 billion (1.42 per cent) compared to the first quarter of 2024.
These figures are part of NEITI’s latest Quarterly Report on Federation Account Revenue Allocations for Q2 2024.
The executive secretary of NEITI, Dr. Orji Ogbonnaya Orji, announced in the report’s released in Abuja.
He emphasised that “The Quarterly Review aims to highlight the sources of funds into the Federation Account and the factors affecting the growth or decline in revenues and distributions over time”.
“The ultimate goal of this disclosure is to enhance knowledge, increase awareness, and promote public accountability in the management of public finances,” Dr. Orji stated.
The NEITI executive secretary urged the citizens and civil society organisations, particularly those involved in revenue and expenditure monitoring, to show interest and strengthen their capacity in budget tracking and monitoring of allocations and disbursements to all tiers of government.
The report revealed the breakdown of revenue allocations as follows: the federal government received N1.102 trillion, representing 33.35 per cent of the total allocation.
The 36 states received N1.337 trillion (40.47 per cent).
The 774 local government councils shared N864.98 billion (26.18 per cent). Additionally, nine oil-producing states received N169.26 billion as their derivation share from mineral revenue.
A comparison with the previous quarter shows that the federal government’s allocation decreased by N41.44 billion (3.76 per cent), while state governments saw an increase of N58.13 billion (4.29 per cent), and local government councils experienced a rise of N30.82 billion (3.57 per cent).
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), and the Nigeria Customs Service (NCS) were identified as the main revenue-generating agencies for the Federation Account.
Their contributions included oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import & excise duties.Month-on-Month TrendsThe report highlighted an upward trend in revenue allocations in the latter months of 2023 and early 2024.
Total monthly disbursements increased from N1.094 trillion in January 2024 to N1.098 trillion in February but then declined slightly to N1.065 trillion in March.
Breakdown of the allocations by states showed that Delta State received the largest share of allocations in Q2 2024, with a gross allocation of N137.357 billion, including oil derivation. Lagos State followed with N123.282 billion, and Rivers State came in third with N108.104 billion.
Nasarawa, Ebonyi, and Ekiti States received the least, with N24.735 billion and N25.404 billion, respectively.
Local Government Allocations Among local governments, Alimosho in Lagos State received the highest allocation at N5.721 billion, followed by Ajeromi/Ifelodun (N4.592 billion) and Kosofe (N4.541 billion).
Ifedayo received the smallest share of N661.82 million. Derivation Revenue Nine states benefited from 13 per cent oil derivation revenue, with Delta State leading at 40.153 per cent, followed by Bayelsa (38.112 per cent) and Akwa Ibom (36.117 per cent).
Rivers State recorded a derivation ratio of 27.272 per cent, while the other oil-producing states had ratios below 20 per cent.
The report also noted that solid minerals-producing states did not receive derivation revenue in Q2 2024 due to insufficient revenue generation from the sector.
Debt Deductions
Bauchi State recorded the highest debt deductions in Q2 2024 at N6.49 billion, followed by Ogun State. Anambra State had the least deductions at N115.6 million, while Lagos and Nasarawa recorded no debt deductions for the quarter.
NEITI recommended that states take advantage of ongoing reforms in the solid minerals sector to diversify their revenue sources.
The Central Bank of Nigeria should strengthen measures to stabilise the exchange rate and reduce fluctuations in Federation Account remittances.
States should adopt realistic budget benchmarks for oil production and exports to minimise fiscal shocks from price volatility.
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and the Office of the Accountant General of the Federation (OAGF) were encouraged to increase transparency and accountability, particularly in the payment of special revenue accruals like derivation arrears and debt repayment refunds.
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Tag: FAAC Distributes N3473trn To FG States LGs In Q2 NEITI
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Published 9/17/2024