THE three tiers of government in Nigeria – Federal, States and Local Government Areas (LGAs) – shared N10.143 trillion from the Federation Account as statutory revenue allocations in 2023.
The data were contained in the latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) on the Federation Account revenue allocations for the year 2023.
The Executive Secretary of NEITI, Orji Ogbonnaya Orji, who announced the release of the report on Tuesday, March 19, in Abuja, said the agency embarked on the Federation Allocation Account Committee (FAAC) Quarterly review to enhance public understanding of Federation Account allocations and disbursements as published by the government.
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He said, “The ultimate objective of this disclosure is to strengthen knowledge, awareness and promote public accountability of all institutions in public finance management”.
A breakdown of the revenue receipts showed that the Federal Government received N3.99 trillion, representing 39.37 per cent of the total allocation.
The 36 states got N3.585 trillion, representing 35.34 per cent, while the 774 LGAs shared 2.56 trillion equivalent to 25.28 per cent.
Further analysis of the N10.143 trillion disbursements in 2023 showed an increase of N1.934 trillion or 23.56per cent when compared with the disbursement of N8.209 trillion shared in the corresponding year 2022.
The review attributed the increase to improved revenue remittances to the Federation Account due to the removal of the petrol subsidy and the floating of the exchange rate by the President Bola Tinubu-led government.
The report highlighted that though the total revenues distributed from the Federation Account recorded an overall increase of 23.56 per cent in 2023, the increase that accrued to each tier of government varied, largely due to the type of revenue streams contributing to the inflows into the Federation Account.
Accordingly, NEITI Quarterly Review of 2023 FAAC allocations disclosed that the Federal, State, and LGAs cumulatively received N1.934 trillion more than the amount shared in 2022.
The first quarter of 2023 increased by N579.71 billion (33.19 per cent) when compared to the first quarter of 2022. The second quarter increased by 10.32 per cent, the third quarter by 27.49 per cent and the fourth quarter had an increase of 23.42 per cent respectively.
The Federal Government’s share increased by N574.21 billion (16.79 cent) from the N3.42 trillion it received in 2022 to N3.99 trillion in 2023. The state governments’ share rose to N3.59 trillion in 2023 compared to the N2.76 trillion they got in 2022, showing an increase of 29.99 per cent.
Similarly, the LGAs’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in 2023 which amounts to 26.22 per cent leap.
In the same period in 2023, states and LGAs recorded increases in their allocations of 29.99 per cent and 26.22 per cent respectively. The increase in allocation to the Federal Government, however, was 16.79 per cent.
State-by-state share of the allocations showed that Delta State received the largest share of N402.26 billion (gross).
The figure is inclusive of the state’s share of oil and gas derivation revenue. Delta was followed by Rivers State which got N398.53 billion. Akwa-Ibom State took the third largest allocation of N293.58 billion.
Nasarawa State received the least amount of N73.32 billion while Ebonyi and Ekiti states received N73.91 billion and N74.04 billion respectively.
The review observed that the first five states that topped the allocation during the period under review are amongst the major oil-producing states in the country.
On the share of 13 per cent derivation revenue, nine states received the 13 per cent allocated to mineral-producing states from the proceeds from mineral revenue. The derivation revenue remains a significant portion of revenue for states like Delta, Akwa Ibom, Anambra, and Rivers states.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.