The Federation Accounts Allocation Committee (FAAC) disbursed N3.473 trillion to the three tiers of government in the second quarter of 2024.
This reflects an increase of N46.77 billion (1.42%) compared to the first quarter of 2024 Orji Ogbonnaya Orji NEITI ‘s executive secretary, revealed in a report released Monday.
“These figures are part of NEITI’s latest Quarterly Report on Federation Account Revenue Allocations for Q2 2024,” a statement signed by Chris Ochonu, assistant director, communications & stakeholders management read.
“The Quarterly Review aims to highlight the sources of funds into the Federation Account and the factors affecting the growth or decline in revenues and distributions over time,” Ochonu quoted Orji as saying.
“The ultimate goal of this disclosure is to enhance knowledge, increase awareness, and promote public accountability in the management of public finances.”
The NEITI Executive Secretary urged citizens and civil society organizations, particularly those involved in revenue and expenditure monitoring, to show interest and strengthen their capacity in budget tracking and monitoring of allocations and disbursements to all tiers of government.
Read also: FAAC disburses N1.354 trillion to FG, states, LGs in July, up by N200bn
Breakdown
The Federal Government received N1.102 trillion, representing 33.35% of the total allocation. The 36 states received N1.337 trillion (40.47%) while the 774 local government councils shared N864.98 billion (26.18%).
Additionally, nine oil-producing states received N169.26 billion as their derivation share from mineral revenue. A comparison with the previous quarter shows that the Federal Government’s allocation decreased by N41.44 billion (3.76%), while state governments saw an increase of N58.13 billion (4.29%), and local government councils experienced a rise of N30.82 billion (3.57%).
Key Revenue Contributors
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), and the Nigeria Customs Service (NCS) were identified as the main revenue-generating agencies for the Federation Account. Their contributions included oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import & excise duties.
Month-on-Month Trends
The report highlighted an upward trend in revenue allocations in the latter months of 2023 and early 2024. Total monthly disbursements increased from N1.094 trillion in January 2024 to N1.098 trillion in February but then declined slightly to N1.065 trillion in March.
State-by-State Allocations
Delta State received the largest share of allocations in Q2 2024, with a gross allocation of N137.357 billion, including oil derivation. Lagos State followed with N123.282 billion, and Rivers State came in third with N108.104 billion. Nasarawa, Ebonyi, and Ekiti States received the least, with N24.735 billion and N25.404 billion, respectively.
Local Government Allocations
Among local governments, Alimosho in Lagos State received the highest allocation at N5.721 billion, followed by Ajeromi/Ifelodun (N4.592 billion) and Kosofe (N4.541 billion). Ifedayo received the smallest share of N661.82 million.
Derivation Revenue
Nine states benefited from 13% oil derivation revenue, with Delta State leading at 40.153%, followed by Bayelsa (38.112%) and Akwa Ibom (36.117%). Rivers State recorded a derivation ratio of 27.272%, while the other oil-producing states had ratios below 20%.
The report also noted that solid minerals-producing states did not receive derivation revenue in Q2 2024 due to insufficient revenue generation from the sector.
Debt Deductions
Bauchi State recorded the highest debt deductions in Q2 2024 at N6.49 billion,The Federation Accounts Allocation Committee (FAAC) disbursed N3.473 trillion to the three tiers of government in the second quarter of 2024. followed by Ogun State. Anambra State had the least deductions at N115.6 million, while Lagos and Nasarawa recorded no debt deductions for the quarter.
Key Recommendations
NEITI recommended that states take advantage of ongoing reforms in the solid minerals sector to diversify their revenue sources. NEITI recommended that the Central Bank of Nigeria strengthen measures to stabilise the exchange rate and reduce fluctuations in Federation Account remittances. It also recommended that states should adopt realistic budget benchmarks for oil production and exports to minimise fiscal shocks from price volatility.
The Revenue Mobilisation Allocation and Fiscal Commission (RMFAC) and the Office of the Accountant General of the Federation (OAGF) were encouraged to increase transparency and accountability, particularly in the payment of special revenue accruals like derivation arrears and debt repayment refunds
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