The Nigeria Extractive Industries Transparency Initiative (NEITI) announced that the Federation Accounts Allocation Committee (FAAC) disbursed N3.473 trillion to the three tiers of government in the second quarter of 2024. This represents a 1.42% increase (N46.77 billion) from the previous quarter.
This disclosure was made in a statement by NEITI’s Assistant Director of Communications and Advocacy, Chris Ochonu, on Monday. The figures were part of NEITI’s latest Quarterly Report on Federation Account Revenue Allocations for Q2 2024.
During the report’s unveiling in Abuja, NEITI Executive Secretary, Dr. Orji Ogbonnaya Orji, explained that the review provides insights into the sources of revenue for the Federation Account and examines the factors contributing to the rise or fall in revenue over time. “The goal of this report is to enhance public understanding, raise awareness, and promote accountability in managing public finances,” Dr. Orji stated.
The Federal Government received N1.102 trillion, representing 33.35% of the total allocation, while the 36 states got N1.337 trillion (40.47%), and 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.
In comparison to the previous quarter, 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%).
NEITI identified the Nigeria Upstream Petroleum Regulatory Commission, the Federal Inland Revenue Service, and the Nigeria Customs Service as the major contributors to the Federation Account, with their revenue sources including oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import and excise duties.
The report also noted a steady increase in revenue allocations from late 2023 to early 2024, with total monthly disbursements rising from N1.094 trillion in January 2024 to N1.098 trillion in February, before slightly declining to N1.065 trillion in March.
Delta State received the highest allocation in Q2 2024, with N137.36 billion, including oil derivation funds. Lagos followed with N123.28 billion, and Rivers received N108.10 billion. Nasarawa, Ebonyi, and Ekiti states received the least allocations, with N24.735 billion and N25.40 billion, respectively.
Among local governments, Alimosho in Lagos received the highest allocation at N5.72 billion, followed by Ajeromi/Ifelodun (N4.59 billion) and Kosofe (N4.54 billion). Ifedayo received the lowest share at N661.82 million.
NEITI also highlighted that nine states benefited from the 13% oil derivation revenue, with Delta leading at 40.153%, followed by Bayelsa (38.112%) and Akwa Ibom (36.117%). Rivers recorded a 27.272% derivation ratio, while other oil-producing states received less than 20%.
However, solid minerals-producing states did not receive derivation revenue in Q2 2024 due to insufficient revenue generation from the sector.
Bauchi State recorded the highest debt deductions in Q2 2024 at N6.49 billion, followed by Ogun State. Anambra State had the lowest deductions at N115.6 million, while Lagos and Nasarawa recorded no debt deductions.
NEITI recommended that states take advantage of reforms in the solid minerals sector to diversify their revenue streams. The report also urged the Central Bank of Nigeria to stabilise the exchange rate and minimise fluctuations in Federation Account remittances. Additionally, it called on states to adopt realistic budget benchmarks for oil production to reduce fiscal shocks from price volatility.
NEITI further advised the Revenue Mobilisation Allocation and Fiscal Commission and the Office of the Accountant General of the Federation to improve transparency in managing special revenue accruals like derivation arrears and debt repayment refunds.
Dr. Orji also encouraged citizens and civil society organisations, especially those involved in revenue and expenditure monitoring, to strengthen their capacity in tracking and monitoring budget allocations and disbursements across all levels of government.