The Federation Account Allocation Committee (FAAC) disbursed N2.273 trillion to the three tiers of government and other statutory recipients between July and September 2019, according to data contained in the latest edition of the Quarterly Review by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The report which was signed by the Director, Communications & Advocacy of NEITI, Dr Orji Ogbonnaya Orji, and made available to newsmen in Abuja on Monday in Abuja showed that the disbursement was 18.79% higher than the N1.913 trillion disbursed in the second quarter of 2019 and 17.81% higher than the N1.929 trillion disbursed in the first quarter of the year.
According to the report, for the first time since the fourth quarter of 2018, total FAAC allocations exceeded N2 trillion in one quarter. Combining this with disbursements in previous quarters showed that FAAC disbursements exceeded N2 trillion in four of the last six quarters.
“The last time this happened was in the third quarter of 2014. This is a big improvement compared to N886.48 billion recorded in 2016 Q2. However, it is still lower than N2.607 trillion of 2013 Q1,” it noted.
A breakdown of the N2.273 trillion disbursed in the quarter showed that the Federal Government received N920.2 billion, while the states and local governments received N724.16 billion and N44.19 respectively.
The report said the amount received by FG in the third quarter of 2019 was 15.6% higher than the N795.84 billion it received in the second quarter. It was also 14.6% higher than the N803.13 billion it received in the first quarter of the same year.
“For states, the amount received during the third quarter of 2019 was 9.6% higher than the N660.2 billion received in the second quarter, and also 7.3% higher than the N675.2 billion received in the first quarter of the same year.” It added.
The report also showed that the amount received by the local governments for the same period was 12.02% higher than the N393.95 billion received in the second quarter and 10.73% higher than the N398.44 billion received in the first quarter.
Further analysis showed that aggregate FAAC disbursements for the first nine months of 2019 were N6.115 trillion. The breakdown showed that between January and September 2019, the FG received a total of N2.519 trillion, while the states and the local governments received N2.059 trillion and N1.223 trillion respectively.
On disbursements to the States in the third quarter of 2019, the NEITI Quarterly Review noted a wide disparity between Osun State (which received the lowest amount of N6.89 billion) and Delta State that got the highest disbursement of N54.88 billion. This implied that Delta State received almost eight times what Osun State got.
The review also showed that the 4 states with the highest net disbursements, which were all in the South-South geopolitical zone, received a combined total of N173.65 billion. This was more than the combined total of N164.58 billion received by the 14 states with the lowest disbursement.
On direct deductions from states’ allocations in the third quarter of 2019, Yobe State had the lowest deductions of N593.03 million while Lagos recorded the highest deduction of N12.09 billion.
The NEITI review also disclosed that “combined FAAC disbursements for the first three quarters of 2019 – taken as a percentage of 2019 budgets- were above 30% in only seven states. The review further noted that the majority of the states had received below 30% of their annual budgets in FAAC disbursements after the ninth month of 2019. Net FAAC disbursements being below 30% in most states is worrying because most states depend on FAAC disbursements for at least 80% of their revenues.
The implication, according to the review, is that most states’ budgets would be underfunded this year. The possible exceptions are Lagos, Rivers and Ogun States, which have a considerable history of high internally generated revenue (IGR).