FAAC shares N1.9trn in Q1 2018 – NEIT

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The Nigeria Extractive Industries Transparency Initiative (NEITI) said the Federation Account Allocation Committee (FAAC) disbursed N1.938 trillion in the first quarter of 2018 to the federal, states, local government areas, and other beneficiaries.

The amount shared represented an increase of 37.3 percent when compared with N1.411 trillion shared during the same period in 2017 and 71.1 percent of the N1.132 trillion shared in the same quarter of 2016. A breakdown of FAAC allocations shows that the Federal Government received N812.8 billion, the 36 states got N683.4 billion, while N393.3 billion went to the 774 local governments. A further breakdown shows that N655.2 billion was disbursed by FAAC in January, N635.6 billion in February, and N647.4 billion in March this year.

The information contained in the latest edition of the NEITI Quarterly Review indicates that Osun, Cross River, Ekiti, Zamfara and Ogun States received below N10 billion.

According to the data, the disbursement in the first quarter of 2018 is still 25.6 percent lower than the N2.6 trillion disbursed during the same period in 2013 before the crash in global oil prices.

The report projected brighter prospects for higher revenue disbursements for the rest of the year because of the rising oil prices, which currently hovers around $70 per barrel, in addition to the increase in oil production.

However, the report, called for caution while celebrating the amounts disbursed in the first quarter of 2018 because of the volatility of the international oil market.

NEITI report added that “The year started on a bright note as all tiers of government received higher revenues than corresponding quarters in the past two years. This was largely on the account of sustained increase in domestic oil production and global oil prices.”

On allocations received by each State, the report reveals that Akwa Ibom got the highest amount of N50.44 billion, while Osun State received the lowest net share of N4.99 billion, a variance of 920% between the highest and the lowest.

The NEITI report explained that these disparities in FAAC disbursements suggest differences in revenue capacities of different states and the implications for expenditure decisions in the affected states.

Moreover, littoral and oil rich states get more allocation compared to states without oil or viable natural resources. This account for why Akwa Ibom which is believed to have more oil blocs got the highest allocation and not necessarily its size or population. The increase in oil price around $76 also gave boost to the oil rich states.

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