The federal government and other tiers of government shared a total of N1.95 trillion, which accumulated to the Federation Account in the first quarter of 2020 (Q1, 2020), the Nigeria Extractive Industries Transparency Initiative (NEITI) said yesterday.
NEITI, in a statement by its Director of Communications and Advocacy, Dr. Ogbonnaya Orji, said the funds shared also got to other statutory agencies in the country.
The statement said N791.4 billion was given to the federal government, states got N669 billion and about N395 billion was given to the 774 local government areas as their share by the Federation Account Allocation Committee (FAAC).
The balance of the total earning, it explained, was sent to statutory agencies and accounts, including the North East Development Commission (NEDC), the Excess Crude Account (ECA), Federal Inland Revenue Service (FIRS), Nigeria Custom Service (NCS) and the Department of Petroleum Resources (DPR).
NEITI noted that the Q1, 2020 FAAC disbursement was the highest first quarter disbursement the country had since 2014.
“Total disbursements were N1.648 trillion in Q1, 2015; N1.132-trillion in Q1, 2016; N1.411 trillion in Q1-2017; N1.938 trillion in Q1-2018; and N1.929 trillion in Q1-2019,” it added.
The agency noted that the total FAAC allocations during the period under review comprised gross disbursements to the federal, state, local governments and the 13 per cent derivation to beneficiary states.
It added that it covered the cost of collections by the Nigerian Customs Service, the Federal Inland Revenue Service, the Department of Petroleum Resources and other allied handling charges as well.
NEITI said from the previous years, with the exception of 2018, the general trend since 2015 had been that total disbursements fell in the second quarters, before rising in the third quarters.
It also noted that with the COVID-19 pandemic, it’s almost certain that total disbursements would fall in the second quarter of 2020.
On FAAC disbursements to states between January and March, it explained that there was a wide disparity between states as Osun State got the lowest allocation of N6.44 billion, while Delta State got the highest of N52.03 billion.
The review also disclosed that Delta State’s net FAAC disbursements were higher than the combined total net disbursements of N50.67 billion of the six lowest receiving states, comprising Osun, Cross River, Plateau, Ogun, Ekiti, and Gombe.
Further analysis from NEITI revealed that combined disbursements to four states – Delta, Akwa Ibom, Rivers, and Bayelsa – with the highest net FAAC disbursements were higher than the combined net disbursements for the 17 states with the lowest disbursements.
“The combined total net disbursement to these four states was N167.76 billion. This figure is higher than the combined total of N159.99 billion received by the 17 lowest receiving states (Osun, Cross River, Plateau, Ogun, Ekiti, Gombe, Zamfara, Kwara, Nasarawa, Ebonyi, Taraba, Benue, Adamawa, Bauchi, Abia, and Kogi),” it stated.
It explained that 31 states received less than N20 billion as total net FAAC disbursements in the first quarter of this year, while only five states received more than N20 billion.
The states, according to it, were Lagos which got N26.23 billion, Bayelsa – N35.14 billion, Rivers – N39.99 billion, Akwa Ibom – N40.61 billion, and Delta – N52.03 billion.
The review showed a wide disparity in the amounts deducted from the states as their debt obligations.
It said for instance that Lagos had the highest deductions of N14.92 billion, while Yobe State had the lowest deductions of N820.18 million.
On prospects of FAAC disbursements for the rest of the year as a result of the impact of COVID-19, NEITI said: “In light of the ‘double whammy’ of declining oil demand and oil prices as a result of the COVID-19 pandemic, government revenue would likely continue to fall in subsequent months.
“As global crude oil prices plummet in the midst of the global oil supply glut arising from lockdown of economic activities in many countries of the world, all tiers of government will struggle to fund their 2020 budgets.
“The interesting point to note is that while the share of oil revenue represents the direct revenue, there are also indirect sources of revenue from oil. These include signature bonus and renewals and share of dividends from NLNG.
“In addition, taxes and customs duties, which are based on economic activities, will suffer in the light of the lockdown of the major activity hubs of the country,” it added.
NEITI also called for innovative and concerted actions on the part of the government at all levels to mitigate the impact of the pandemic on revenues and the economy.
It also welcomed what it said were proactive measures already taken by the federal government, which include the approval to withdraw $150 million from the Stabilisation Fund to supplement FAAC disbursements, initiating modalities for states to benefit from debt and interest moratorium, review of 2020 budget to reflect current economic realities and a $3.4 billion facility by the International Monetary Fund (IMF).
Source: THISDAY
