NEITI: Subsidy removal, naira float increased FAAC disbursement to N10trn in 2023

The Nigeria Extractive Industries Transparency Initiative (NEITI) says the three tiers of government shared N10.14 trillion from the federation account as statutory revenue allocations in 2023.

Orji Ogbonnaya Orji, executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), spoke on the federation account revenue allocations for 2023 in a report in Abuja on Tuesday.

According to NAN, Orji said the NEITI quarterly review of the federation account allocation committee (FAAC) was carried out to improve public understanding of federation account allocations and disbursements as published by the government.

He said the main objective of the report was to increase knowledge, awareness, and promote public accountability across all institutions in public finance management.

‘FAAC DISBURSEMENT INCREASED BY N1.934 TRN IN 2023’

“A further analysis of the N10.143 trillion disbursements in 2023 showed an increase of N1.934 trillion or 23.56 per cent when compared to the disbursement of N8.209 trillion shared in 2022,” he said.

“The review attributed the increase to improved revenue remittances to the Federation Account due to the removal of petrol subsidy and the floating of the exchange rate by the new administration.

“The report highlighted that while total revenues distributed from the account recorded an increase of 23.56 per cent in 2023, the increase accruing to each tier of government varied due to the type of the revenue streams contributing to the inflows into the Federation Account.”

Orji said allocations for the first quarter (Q1) of 2023 increased by N579.71 billion (33.19 percent) when compared with Q1 of 2022. 

Also, he said disbursements in the second, third, and fourth quarters increased by 10.32 percent, 27.49 percent, and 23.42 percent respectively.

“The Federal Government’s share increased by N574.21 billion (16.79 per cent) from the N3.42 trillion it received in 2022 to N3.99 trillion in 2023,” he said.

“The state governments shared N3.59 trillion in 2023 compared to the N2.76 trillion they got in 2022, showing an increase of 29.99 per cent.

“Similarly, local government councils’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in 2022, which amounts to a 26.22 per cent increase, while total distributed revenue from the Federation account recorded an increase of 23.56 per cent in 2023.” 

The NEITI executive secretary said in the same period, states and local governments recorded increases in their allocations of 29.99 percent and 26.22 percent respectively.

“The increase in allocation to the Federal Government, however, was 16.79 per cent,” Orji added.

‘DELTA STATE RECEIVED N402.26BN, RIVERS RECEIVED N398.53BN’

Orji said the state-by-state share of the allocations showed that Delta received the largest amount at N402.26 billion (gross), followed by Rivers which received N398.53 billion.

According to the NEITI boss, the figure is inclusive of the state’s share of oil and gas derivation revenue.

“Akwa-Ibom State received 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,” he said.

“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.”

Meanwhile, Orji said nine states received the 13 percent allocated to mineral-producing states from proceeds of mineral revenue.

“The derivation revenue remains a significant portion of revenue for states like Delta, Akwa Ibom, Anambra and Rivers states,” he said.

“Also, the derivation revenues of states such as Delta, Akwa Ibom, and Bayelsa, which were 161.47 per cent, 141.25 per cent and 127.89 per cent respectively, eclipsed their statutory revenues.

“Rivers State’s derivation revenue was 74.15 per cent during the period. Notably, the other five oil producing states recorded lesser derivation revenue compared to the four above.

“For example, Ondo State had 27.71 per cent, Edo had 30.04 per cent, while Abia, Anambra and Imo recorded a derivation revenue of about 20 per cent or less.”

Orji added that solid minerals-producing states did not receive derivation revenues during the last quarter of 2023 because of the requirement that earnings accrue over time before being shared.