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How FG, States, LG’s shared N4.5trn in 9 months



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The latest Quarterly review of the Nigeria Extractive Industries Transparency Initiative (NEITI) indicated that a total sum of N4.545 trillion was disbursed as FAAC allocation to the three tiers of Government between January and September 2017.

NEITI Director of Communication, Dr Orji Ogbonnaya Orji while briefing the press, stated that N1.757 trillion was shared in the 3rd Quarter of 2017. The first and second Quarter figures was put at N1.411 trillion and N1.377 trillion respectively.

As usual, the FG received a large chunk of the allocation of N1.851.32 trillion, followed by the 36 states and 774 local government areas that received N1.509 trillion and N913.8 billion respectively. Giving a further breakdown of the allocation, Dr Ogbonnaya mentioned that the DPR, Custom services and the FIRS received N271.78 billion as cost of revenue allocation.

There was a significant drop of 42% of allocation to the states in the first three Quarters of 2017 due to a drop in total revenue. As a result of this sharp drop, the NEITI Director encouraged states to focus more on raising internally generated revenue (IGR) rather than depending wholly on monthly allocation from the Federal Government (FG). Failure to do this may impact negatively on budget implementation at the state level. Unfortunately though, most states have now resorted to borrowing to fill the deficit as a result of the shortfall.

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A negative trend mentioned by the NEITI Director was the fact that FAAC allocation to 15 states in Nigeria had a ratio of budgets lower than 20%. Following the usual pattern over the years, it was observed that revenue allotted to states and LGs were higher in the 3rd Quarter of 2017. The review showed an increase of 37.02% allocation from 2nd Quarter to 3rd Quarter. At the state and local government level, the percentage increase from 2nd to 3rd Quarter was 25.57% and 29.80% respectively.

Further highlight from the NEITI report showed that the 1st half of 2017 witnessed a drop of 49% between budgeted figures and actual revenue. N5.368 trillion was projected by the FG while only N2.712 trillion actually accrued as revenue in the first six months. Luckily, the disparity between projected and actual revenue for non-oil sector in the half year wasn’t much as 2.667 trillion was projected and 2.701 trillion came as revenue.

On the flip side of the review, there was a shortfall in actual revenue for the first half of the year. Actual oil revenue was N1.587 trillion. This figure indicated a shortfall of N1.079 trillion. The significance of this shortfall was that underperformance was 40.4%. Non-oil revenue on the other hand did not fare better as underperformance was 41.6%.

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