Federation account allocations soared by 43% in 2024 – NEITI

…Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, Kano get over N200 billion each

The Federation Accounts Allocation Committee (FAAC) disbursed an unprecedented N15.26 trillion to the Federal, States, and Local Governments in 2024, representing a historic high in revenue distribution and a 43% increase compared to previous years.

The NEITI FAAC Quarterly Review, released on Tuesday in Abuja by the Nigeria Extractive Industries Transparency Initiative (NEITI) reported that Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33% of total allocations to all States,

The Report attributed the surge in revenue disbursements to sustained fiscal reform policies of the Federal Government, especially the removal of fuel subsidies and foreign adjustment exchange rate policies which had continued to impact positively on oil revenue remittances.

According to Orji Ogbonnaya Orji, executive secretary of NEITI, the analyses were conducted against the backdrop of major fiscal reforms that reshaped the revenue landscape.

“Particularly the impact of subsidy removal in mid-2023 on national and sub-national finances and the consequences of debt repayment deductions on State allocations.

Orji said the report’s objective was to assess the sustainability of the Federal and State governments’ borrowing to fund their projects and programmes, as well as the implications of natural resource dependence, particularly for States benefitting from the 13% derivation revenue from oil, gas, and solid minerals.

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He added that “The analysis focused on crude oil revenue derivation states, as solid minerals continue to underperform despite their significant potentials.”

Breakdown of Disbursements:
Federal Government: N4.95 trillion.
State Governments: N5.81 trillion.
Local Governments: N3.77 trillion.
Total FAAC Disbursements (Including Derivation Revenue): N15.26 trillion.

The NEITI FAAC Quarterly Review showed that distribution to State governments in 2024 recorded the largest percentage increase of 62% from N3.58 trillion in 2023, followed by Local Government Councils with a 47% increase, while the Federal Government’s share rose by 24% from N3.99 trillion in 2023 to N4.95 trillion in 2024.

It highlighted that total FAAC allocations increased by 66.2% from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024, with the most significant growth occurring between 2023 and 2024.

The Report attributed the sustained rise in revenue disbursements to the Government’s fiscal reforms, specifically the removal of fuel subsidy and exchange rate adjustments, which boosted naira-denominated mineral revenue by over 400%.

While NEITI welcomes and would continue to support the reforms with credible information and data, the Review called for adequate measures to manage and mitigate economic and other social risks associated reforms in transitional economies like Nigeria.

NEITI outlined such risks to include: Inflationary Pressures, possible rise in Debt Servicing Costs, Fiscal Uncertainties for States Dependent on oil revenues.

The report also revealed that Lagos State received the highest allocation of N531.1 billion in 2024, followed by Delta (N450.4 billion) and Rivers (N349.9 billion). Conversely, Nasarawa State received the least allocation of N108.3 billion, followed by Ebonyi (N110 billion) and Ekiti (N111.9 billion).

while the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5%.

The report revealed a major financial divide, with the top four states—Lagos, Delta, Rivers, and Akwa Ibom—collectively receiving N1.49 trillion, over three times more than the combined total of the bottom four States—Kwara, Ekiti, Ebonyi, and Nasarawa—which received N442.4 billion.