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36 states shared N1.51 trn FAAC allocation in six months

N4trn cash bonanza coming for FG, states, LGs as FAAC gets boost

The 36 states of the federation, in the first half of 2023( January-June), received a total of N1.51trillion, as allocation from the Federal Account Allocation Committee (FAAC), Nigerian Extractive Industries Transparency Initiative (NEITI) report reveals.

According to the report, the N1.51 trillion shared among the states represents 34.5 per cent of the N4.37 trillion shared by the three tiers of the government between January and June 2023.

A breakdown of the report showed that the states received about N817.79 billion from the N2.32 trillion total distributable allocation in the first quarter and N688.2 billion of the N2.04 trillion allocation in the second quarter.

Apart from the share of the statutory allocations, the report showed that the nine oil-producing states, including Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers, received additional allocations as their share of the 13 per cent derivation revenue to bring their total receipts to about N869.09 billion.

On a year-on-year basis, the report showed that compared with the corresponding period in 2022, allocations to the State governments grew from N1.26 trillion.

Read also: Despite rising FAAC allocations, poverty spreads in states

In the period under review, Delta state received the largest allocation of N102.79 billion among the 36 states in the second quarter, followed by Akwa Ibom and Rivers states, which received N70.01 billion and N69.73 billion, respectively.

Ekiti, Ebonyi and Nassarawa States received the lowest allocations of N16.95 billion, N16.84 billion and N16.71 billion, respectively.

Regarding debt repayment, the report showed that the deduction from Lagos state topped the 36 states’ allocations to service pending debts due to foreign loans and contractual obligations such as irrevocable standing payment orders (ISPO) and other liabilities standing against each form.

The total deduction from the Lagos State allocation in the second quarter of 2023 was N9 billion, being the highest, followed by Delta (N6.76 billion), Ogun (N6.10billion), Kaduna (N5.63billion) and Osun (N5.6billion).
Enugu, Kebbi, Nasarawa, Anambra, and Jigawa states recorded the lowest deductions of N1.88billion, N1.51billion, N1.45 billion, N1.29 billion and N1.16 billion, respectively.

“After all the deductions, Delta State’s net allocation of N96.03 billion remained the highest, followed by Rivers (N66.81 billion), Akwa Ibom (N64.81 billion), Lagos (N51.61 billion) and Bayelsa (N51.53 billion).

“However, Plateau, Ogun, and Osun are the states whose revenue receipts in the second quarter were negatively impacted by the debt deductions.
Plateau State, which occupied the 21st position among the 36 states before the debt deduction, dropped to the 31st position. At the same time, Ogun moved from the 28th position to 35th and Osun from 32nd position to 36th position,” it stated.

Read also: No access to statutory allocations, poor IGR responsible for LGs weak finance base – Experts

“In terms of the ratio of each state’s deduction from the allocation for debt repayment, the report expressed concern over the situation affecting Ogun, Osun and Cross River States, although Rivers, Jigawa, and Kebbi states showed strong sustainability capacity.

While the debt deductions from most of the states’ allocation left them with significant net take-home, at least two states (Ogun and Osun) debt deductions were above 30 per cent. In contrast, the deductions from Cross River and Plateau state’s allocations were 29 per cent and 28 per cent respectively.

The report said Imo, Ekiti, Gombe, Kaduna and Bauchi recorded deductions that accounted for almost a quarter of their gross allocations.