‘Lagos N531bn, Delta N450bn’ — NEITI says FAAC disbursed N15trn in 2024

The Nigeria Extractive Industries Transparency Initiative (NEITI) says the federation accounts allocation committee (FAAC) disbursed N15.26 trillion to the federal, state, and local governments in 2024.

NEITI attributed the surge to the federal government’s fiscal reform policies, particularly the removal of petrol subsidy and foreign exchange rate adjustments, which the agency said have significantly boosted oil revenue remittances.

Presenting the NEITI FAAC quarterly review on Tuesday, Orji Ogbonnaya Orji, the agency’s executive secretary, said the analysis was carried out in the context of significant fiscal reforms that transformed the revenue landscape, with a particular focus on the effects of subsidy removal on both national and subnational finances.

“The report’s objective is to assess the sustainability of the federal and state governments’ borrowing to fund their projects and programmes,” Orji said.

“As well as the implications of natural resource dependence, particularly for states benefitting from the 13 percent derivation revenue from oil, gas, and solid minerals.

“The analysis focused on crude oil revenue derivation states, as solid minerals continue to underperform despite their significant potential.”

Orji said the federal government received N4.95 trillion, state governments got N5.81 trillion, and local governments were allocated N3.77 trillion.

He said state governments recorded the highest percentage increase, with allocations growing by 62 percent from N3.58 trillion in 2023 to N5.81 trillion in 2024, while the local government allocations rose by 47 percent.

“The federal government’s share rose by 24 percent from N3.99 trillion in 2023 to N4.95 trillion in 2024,” the secretary said.

“The report highlights that total FAAC allocations increased by 66.2 percent from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024, with the most significant growth occurring between 2023 and 2024.”

Orji said NEITI remains committed to supporting the ongoing reforms by providing reliable information and data.

He stressed the need for effective measures to address and reduce economic and social risks linked to reforms in transitional economies like Nigeria.

The secretary said the risks include inflationary pressures, potential increases in debt servicing costs, and financial instability for states reliant on oil revenues.

Orji urged governments at all levels to adopt innovative strategies to cushion the effects of the economic challenges.

‘LAGOS RECEIVED HIGHEST ALLOCATION IN 2024’

He also reported that Lagos state received the highest allocation of N531.1 billion in 2024, followed by Delta (N450.4 billion) and Rivers (N349.9 billion).

“Conversely, Nasarawa state received the least allocation of N108.3 billion, followed by Ebonyi (N110 billion) and Ekiti (N111.9 billion),” he said.

“Furthermore, six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33 per cent of total allocations to all states.

“While the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5 percent.

“The report revealed a major financial divide, with Lagos, Delta, Rivers, and Akwa Ibom—collectively receiving N1.49 trillion, over three times more than the combined total of the bottom four states—Kwara, Ekiti, Ebonyi, and Nasarawa—which received N442.4 billion.

“The review highlighted that total debt deductions for states’ foreign debts and other contractual obligations amounted to N800 billion, representing 12.3 per cent of total allocations to the 36 states, including derivation revenue.”

The secretary said Lagos state recorded the highest debt deduction of N164.7 billion, accounting for over 20 percent of total deductions.

He said Kaduna state followed with N51.2 billion, while Rivers (N38.6 billion) and Bauchi (N37.2 billion) also recorded significant debt deductions.

Orji advised the government to sustain policy reform measures to encourage sustainable revenue growth and economic stability with priority attention focused on job creation, poverty reduction and control of inflation on goods and services.