• Wednesday, February 21, 2024
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FAAC allocation to states up 20% in one year

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

The total amount disbursed by the Federation Account Allocation Committee (FAAC) to the 36 states in the country rose by 19.8 percent in one year.

According to the latest report by Nigerian Extractive Industries Transparency Initiative (NEITI), the 36 states received N1.51 trillion in the first half of 2023, up from N1.26 trillion in the same period of 2022.

NEITI said the states got about N817.8 billion from the N2.32 trillion total distributable allocation in the first quarter and N688.2 billion from the N2.04 trillion allocation in Q2.

The N1.51 trillion shared among the states represented 34.5 percent of the N4.37 trillion shared by the three tiers of government between January and June.

A breakdown of the report shows that Delta State received the largest allocation of N102.8 billion in Q2, followed by Akwa Ibom and Rivers, which received N70 billion and N69.7 billion, respectively.

Ekiti, Ebonyi and Nasarawa received the lowest allocations of N16.9 billion, N16.8 billion and N16.7 billion, respectively.

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

Every month, federally collected revenue are shared by FAAC revenue among the federal government, the 36 states and all 774 local governments.

FAAC allocation is however not the only source of revenue for states and the local governments as they also have internally generated revenues.

The NEITI report highlighted that regarding debt repayment, the deduction from Lagos topped the 36 states’ allocations to service pending debts due to foreign loans and contractual obligations such as irrevocable standing payment orders and other liabilities standing against each form.

The total deduction from Lagos allocation in Q2 was N9 billion, being the highest, followed by Delta (N6.76 billion), Ogun (N6.10 billion), Kaduna (N5.63 billion) and Osun (N5.6 billion).

Enugu, Kebbi, Nasarawa, Anambra, and Jigawa recorded the lowest deductions of N1.88 billion, N1.51 billion, N1.45 billion, N1.29 billion and N1.16 billion, respectively.

“After all the deductions, Delta State’s net allocation of N96.0 billion remained the highest, followed by Rivers (N66.8 billion), Akwa Ibom (N64.8 billion), Lagos (N51.61 billion) and Bayelsa (N51.53 billion),” NEITI said.

“However, Plateau, Ogun, and Osun are the states whose revenue receipts in the second quarter were negatively impacted by the debt deductions,” it added.