FAAC Payments to States Fall by N1.453tn — NEITI

NEITIZainab Ahmed, Executive Secretary, NEITI
  • FAAC Payments to States Fall by N1.453tn

The payments from the Federation Account Allocation Committee to state governments plunged by N1.453tn between 2013 and 2016, the Nigeria Extractive Industries Transparency Initiative has said.

According to NEITI, the fall from N3.095tn that the states received in 2013 to N1.642tn in 2016, represents a 46.9 per cent decline, which was higher than the plunge in disbursements experienced by the federal and local governments during the same period.

The agency was, however, quick to explain that the reduction in Nigeria’s crude oil production, as well as the fall in global oil prices during the review period largely contributed to the decline in disbursements to the three tiers of government.

NEITI, in its latest quarterly report obtained by our correspondent in Abuja on Friday, said, “Total disbursements to all tiers of government have experienced a general decline since 2013. The figure shows that disbursements fell consistently from 2013 to 2016.

“The Federal Government received N3.711tn in 2013 and this fell by 43.9 per cent to N2.08tn in 2016. Similarly, disbursements to state governments totalled N3.095tn in 2013. In 2016, states received N1.642tn, which represents a 46.9 per cent decline over the 2013 figures.”

It added, “Disbursements to local governments experienced the lowest decline among the three tiers of government. Local governments received total disbursements amounting to N1.011tn in 2016. This was 40.7 per cent lower than N1.708tn they received in 2013.”

Drawing projections from what transpired in the country’s economy in 2016, the agency stated that because of the dependence of government revenue on petroleum exports, Nigeria’s public finances were subject to frequent upswings and downswings, following movement of global oil prices.

It stated that all the three tiers of government had been subjected to dwindling revenues as a result of militant attacks in the Niger Delta and falling/unstable oil prices.

It said, “This review showed that government revenue started rising in the second half of 2016. In 2016, oil production fell from January until August, after which it started rising. There was a gradual rise in oil prices from $30.70/barrel in January 2016 to $54.58/barrel in January 2017.”

NEITI further explained that FAAC’s disbursements to the three tiers of government increased by 1.18 per cent between the fourth quarter of 2015 and the fourth quarter of 2016.

It said the total payments to the three tiers of government in the fourth quarter of 2016 amounted to N1.214tn.

This, according to NEITI, represents an improvement of 1.18 per cent over N1.2tn disbursed in the corresponding quarter of 2015.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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