The Nigeria Extractive Industries Transparency Initiative (NEITI) has reported a significant increase in revenue allocations from the Federation Accounts Allocation Committee (FAAC). In 2024, the federal, state, and local governments received N15.26 trillion, marking a 43% increase compared to previous years.
Why Did FAAC Disbursements Increase?
NEITI attributes this rise in revenue to key government policies, particularly:
- Fuel subsidy removal, which freed up more funds for government spending.
- Foreign exchange rate adjustments, leading to higher oil revenue remittances.
Breakdown of FAAC Allocations
NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, explained that the revenue was distributed as follows:
- Federal Government: N4.95 trillion
- State Governments: N5.81 trillion
- Local Governments: N3.77 trillion
The largest increase was seen in state allocations, which grew by 62%, from N3.58 trillion in 2023 to N5.81 trillion in 2024. Local government allocations also saw a 47% increase, while the federal government’s share rose by 24%.
Which States Received the Highest Allocations?
- Lagos State: N531.1 billion (highest allocation)
- Delta State: N450.4 billion
- Rivers State: N349.9 billion
Which States Received the Least?
- Nasarawa State: N108.3 billion
- Ebonyi State: N110 billion
- Ekiti State: N111.9 billion
Financial Disparity Among States
The report highlighted a major financial gap between states. For example:
- Lagos, Delta, Rivers, and Akwa Ibom received a combined N1.49 trillion, which is over three times more than the total amount received by Kwara, Ekiti, Ebonyi, and Nasarawa (N442.4 billion).
- Six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—accounted for 33% of total allocations.
- Meanwhile, the six lowest-receiving states made up only 11.5% of total allocations.
Debt Deductions from Allocations
FAAC allocations are also affected by debt repayments. In 2024:
- Total state debt deductions: N800 billion (12.3% of total allocations)
- Lagos State: Highest debt deduction at N164.7 billion
- Kaduna State: N51.2 billion
- Rivers State: N38.6 billion
- Bauchi State: N37.2 billion
What Does This Mean for Nigeria’s Economy?
The NEITI report emphasizes the importance of strong economic policies to maintain growth. Key recommendations include: ✔ Job Creation: More employment opportunities to boost the economy. ✔ Poverty Reduction: Programs to help lower-income communities benefit from the increased revenue. ✔ Inflation Control: Managing rising costs of goods and services to improve living conditions.
The NEITI report also calls for government accountability, urging policymakers to ensure effective management of public funds, especially revenues from Nigeria’s natural resources.
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