NEITI: FG’s FAAC revenue dropped by N41.4bn in Q2 2024

The Nigeria Extractive Industries Transparency Initiative (NEITI) says the federal government’s revenue from the federal account allocation committee (FAAC) decreased by N41.44 billion in the second quarter (Q2) of 2024.

However, NEITI said FAAC disbursements to states and local government areas (LGAs) increased during the same period.

Orji Ogbonnaya Orji, the executive secretary and chief executive officer (CEO) of NEITI, spoke at the organisation’s Q2 2024 quarterly review in Abuja on Monday.

In March, NEITI reported that the three tiers of government shared N10.14 trillion from the federation account as statutory revenue allocations in 2023.

In the latest report, NEITI said the federal government’s allocation decreased by N41.44 billion (3.76 percent), while state and local governments saw an increase of N58.13 billion (4.29 percent) and N30.82billion (3.57 percent), respectively.

DELTA RECEIVED LARGEST SHARE

The report said Delta state received the largest share in Q2, with a gross allocation of N137.36 billion, including oil derivation, Lagos followed with N123.28 billion, with Rivers taking the third spot, after recording N108.104 billion as total revenue received from FAAC.

According to the report, Nasarawa, Ebonyi, and Ekiti states recorded the least allocations, receiving N24.735 billion, N25.40 billion, and N25.61 billion, respectively.

TheCable Index analysis of disbursements to local governments showed that the highest allocation at N5.72 billion went to Alimosho in Lagos, followed by Ajeromi/Ifelodun (N4.59 billion), and Kosofe (N4.54 billion).

Also, according to the NEITI report, the smallest allocation (N661.82 million) went to Ifedayo LGA, in Lagos.

“Nine states benefited from 13 per cent oil derivation revenue, with Delta State leading at 40.153 per cent, followed by Bayelsa at 38.112 per cent, and Akwa Ibom at 36.117 per cent. Rivers State recorded a derivation ratio of 27.272 per cent, while other oil-producing states had ratios below 20 per cent,” NEITI said.

NEITI SEEKS TRANSPARENCY AND ACCOUNTABILITY

NEITI recommended that states should adopt realistic budget benchmarks for oil production and exports to avoid fiscal shocks from price volatility.

“The ultimate goal of this disclosure is to enhance knowledge, increase awareness, and promote public accountability in the management of public finances,” Orji said.

He also called on citizens and civil society organisations, particularly those involved in revenue and expenditure monitoring, to take a more active role in budget tracking and monitoring allocations and disbursements to all tiers of government.

NEITI also asked the Central Bank of Nigeria (CBN) to strengthen measures to stabilise the exchange rates and reduce fluctuations in federation account remittances.

In addition, the group advised the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and the office of the accountant-general of the federation (OAGF) to take steps to enhance transparency and accountability, particularly in the payment of special revenue accruals such as derivation arrears and debt repayment refunds.

States were also admonished to take advantage of ongoing reforms in the solid minerals sector to diversify their revenue sources.