How FG, States, LGs shared N3.88trillion in Six months

Within a six months period covering January to June this year, the Federation Accounts Allocation Committee shared N3.879trn to the Federal Government, States, Local government areas, and other statutory recipients.

The information and data are contained in the latest edition of the quarterly review of the Nigeria Extractive Industries Transparency Initiative released today in Abuja.

A breakdown of the disbursements showed that N1.53trn went to the Federal Government, while the states got N1.29trn and the 774 local government areas received N771.34bn

The NEITI Quarterly Review reports that the N1.53trn received by the FG in H1 2020 was 4.28 per cent lower than the N1.599trn it got in the first half of 2019 and 7.36 per cent lower than the N1.652trn it received in the first half of 2018.

The story is the same for the states and local government areas.

“For states, a total of N1.298trn was disbursed in the first half of 2020. This was 2.8 per cent lower than the N1.35trn disbursed in the first half of 2019, and 5.6 per cent lower than the N1.375trn disbursed in the first half of 2020”, the report stated.

For local government areas, the 2020 first half disbursements were 2.64 per cent and 3.04 per cent lower than the corresponding disbursements for 2019 and 2018 respectively.

The report however notes that disbursements in Q2 2020 were 1.09 per cent higher than total disbursements in Q2 2019 and 3.66 per cent lower than the one for Q2 2018.

FAAC disbursements in the second quarter of 2020 stood at N1.934trn. This was made up of N739.2bn to the Federal Government, N629.3bn to state governments, and N375.4bn to the 774 local government areas.

The report pointed out that the total FAAC disbursements in the second quarter of 2020 was slightly lower than the N1.945trn disbursed in the first quarter of 2020.

This aligned with the projections made in the previous issue of the NEITI Quarterly Review which projected lower FAAC disbursement in the second quarter.

The NEITI report attributed the 0.55 per cent decrease in Q2 2020 to a couple of factors.

They are rebound in oil prices in the second quarter as a result of ease of lockdowns by countries across the world and the adjustment of the official exchange rate by the CBN from N307/$1 to N360/$1 in March resulting in higher naira disbursements.

The report also revealed that FAAC disbursements in the first quarter and second quarter of 2020 were very volatile, with the difference in total disbursements between months ranging between N58.9bn and N199.3bn.

During this period the “disbursements were very volatile in the first half of 2020, compared to 2018 and 2019.

Unlike 2018 and 2019 where aggregate disbursements increased and decreased in successive months, in 2020 they fell for two straight months, increased in one month, and then decreased for two straight months, the report stated.

The report also observed that in the months under consideration in 2020, aggregate disbursements fluctuated by large amounts, compared to 2018 and 2019.

“Aggregate disbursements were N716.3bn in January and this fell to N647.4bn in February.“Thereafter, disbursements fell to N581.6bn in March, before increasing to N780.9bn in April.

“Disbursements then fell to N606.2bn in May and to N547.3 billion in June.

These figures indicate differences of N68.9bn between January and February, N65.7bn between February and March, N199.3bn between March and April, N174.7bn between April and May, and N58.9bn between May and June.

“For comparison, the highest inter-month difference in the first half of 2018 was N62.9bn, while the corresponding figure for 2019 was N63.5bn. Thus, there have been very wide fluctuations in aggregate disbursements so far in 2020.”

NEITI also disclosed that from January to May 2020, actual government revenue was N1.62trn, representing 62% of the expected pro-rata revenue of N2.62trn from the revised budget.

It said this also explained a shortfall of 38 per cent in government revenue for the first five months of the year.

As oil prices continue to rise, and with the increased pace of economic activities, NEITI projects that “Government revenue will perform better in the second half of 2020, with the possibility of shortfalls in revenue compared to budgeted figures”.

On total net FAAC disbursements and deductions for states for the first half of 2020, the NEITI Quarterly Review observed wide disparities.

For instance, Osun State had the lowest net disbursement of N13.13bn, while Delta State had the highest net disbursement of N100.81bn.

This implies that Delta State received seven times the disbursement that Osun State received.

According to the report, “Total net disbursements received by Delta State (N100.81bn) was higher than the combined total net disbursements of N99.47bn received by six states – Osun, Cross River, Plateau, Ogun, Gombe and Ekiti.

“Also, the combined total net disbursements of N321.29bn received by the four highest receiving states of Delta, Akwa Ibom, Rivers, and Bayelsa were higher than the combined total net disbursements of N314.08 billion received by 16 states.”

The 16 states are Osun, Cross River, Plateau, Ogun, Gombe, Ekiti,  Zamfara, Kwara, Nassarawa, Ebonyi, Taraba, Benue, Adamawa, Ondo, Bauchi, and Abia.

It said while Lagos State had the highest deductions, Yobe State had the lowest.