FAAC disbursed N3.88 trn to FG, states, LGs in H1 2020

…as report shows 3 straight quarters of declining disbursements

The Federation Accounts Allocation Committee (FAAC) shared N3.879 trillion to the federal, state and local governments among other statutory recipients in the first half of 2020.

A breakdown of the disbursements showed that N1.53 trillion went to the federal, N1.29 trillion to states, and N771.34 billion to the 774 local government areas of the country.

The data are contained in the latest edition of the quarterly review of the Nigeria Extractive Industries Transparency Initiative (NEITI) issued by the director of communications and advocacy, Orji Ogbonnaya Orji, Tuesday, in Abuja.

The NEITI quarterly review showed that the N1.53 trillion received by the Federal Government in H1 2020 was 4.28 percent lower than the N1.599 trillion it got in the first half of 2019 and 7.36 percent lower than the N1.652 trillion it received in the first half of 2018.

The report further showed that, “for states, a total of N1.298 trillion was disbursed in the first half of 2020. This was 2.8 percent lower than the N1.35 trillion disbursed in the first half of 2019, and 5.6 percent lower than the N1.375 trillion disbursed in the first half of 2020”, the report stated.

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

The report, however, noted that disbursements in Q2 2020 were 1.09 percent higher than total disbursements in Q2 2019 and 3.66 percent lower than the one for Q2 2018.

According to the report, FAAC disbursements in the second quarter of 2020 stood at N1.934 trillion, as it emphasised further that this was made up of N739.2 billion to the Federal Government, N629.3 billion to state governments, and N375.4 billion to the 774 local government areas.

The report pointed out that the total FAAC disbursements in the second quarter of 2020 were slightly lower than the N1.945 trillion 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 percent decrease in Q2 2020 to a couple of factors, namely: “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 N58.9 billion and N199.3 billion.

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 N716.3 billion in January and this fell to N647.4 billion in February,” stated the report. “Thereafter, disbursements fell to N581.6 billion in March, before increasing to N780.9 billion in April.

Disbursements then fell to N606.2 billion in May and to N547.3 billion in June. These figures indicate differences of N68.9 billion between January and February, N65.7 billion between February and March, N199.3 billion between March and April, N174.7 billion between April and May, and N58.9 billion between May and June.

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

Osun State had the lowest net disbursement of N13.13 billion, while Delta State had the highest net disbursement of N100.81 billion. This implies that Delta State received seven times the disbursement that Osun State received.