FG, States, LGs share N4.55 trillion in 9 months ―Report

FAAC Members

A total sum of N4.545 trillion was disbursed as Federal Account Allocation Committee (FAAC) allocations between January and September 2017.

Out of this amount, N1.757 trillion was shared in the third quarter of 2017 as against the N1.377 trillion and N1.411 trillion disbursed in the second and first quarters of the year.

This information was contained in the latest Quarterly Review of the Nigeria Extractive Industries Transparency Initiative (NEITI), a copy of which was obtained by the Nigerian Tribune in Abuja, on Wednesday.

The publication, which contained information and data on FAAC disbursements for the third quarter of 2017 and on mid-year budget implementation, also showed that between January and September 2017, the Federal Government received the highest allocation of N1.851.32 trillion, followed by state governments with N1.509 trillion and the 774 local governments with N913.8 billion.

The sum of N271.78 billion, according to NEITI’s quarterly review, went to the Department of Petroleum Resources (DPR), Nigerian Customs Service and the Federal Inland Revenue Service (FIRS) as the cost of revenue collections.

It further showed that the revenues shared to the Federating units were higher in the third quarter of 2017 which has been the pattern for some years now.

The Review attributed the reason for the increases in FAAC disbursements to the three tiers of governments in the third quarter to what it called “positive developments in the oil sector- evident from resurgent oil prices and increased production levels.

“The third quarter also represents the summer season when global oil demand and consequently oil prices are generally higher than other times of the year and this could possibly explain the higher revenue accruals to the Federation account in these third quarters”, it added.

The NEITI quarterly review, which based its analysis on data obtained from FAAC, National Bureau of Statistics, Federal Ministry of Finance and the Budget Office of the Federation, noted that the “upward trend in the FAAC disbursements to the three tiers of governments were encouraging signs which if sustained would improve government expenditures, help to boost economic activities and move the country further away from recession.

It will be recalled that the Federal Government got N549.41billion in the second quarter of 2017, third quarter figures were N752.79billion, an increase of 37.02%. The trend was the same for the states and local governments which received N586.58 billion and N363.98 billion in the third quarter as against N467.13 and 280.42 billion in the second quarter respectively.

The percentage increases between the two quarters for the two tiers of government were 25.57% and 29.80% respectively.

Another major highlight of the report was the high degree of volatility in FAAC disbursements between January and September 2017.

The Federal and Local Governments received highest revenues in July recording as much difference as 75% and 58% respectively between the months with the highest and lowest disbursements. State Governments, on the other hand, got the highest allocations in September with a difference in revenues of about 53% between the high and low revenue months.

The report said the disbursements to the federal, states and local governments have risen and fallen in alternate months throughout the year, making economic planning and execution of capital projects difficult, underlining the need for diversified sources of government revenue to limit volatility and ensure more stable and predictable revenue streams.