Nigeria’s Declining Revenue Coming to an End — NEITI

• Nigeria’s Declining Revenue Coming to an End — NEITI

The decline in revenue accruing to the federation observed since 2014 may be gradually coming to an end judging by the improvement in the recent disbursements to the three tiers of government, the Nigeria Extractive Industries Transparency Initiative has said.

According to NEITI, an increase of 8.8 per cent in the total Federation Account Allocation Committee disbursements made in the fourth quarter of last year indicated that the country’s revenue had started rising and may continue to do so, in contrast to what was recorded in 2014 and 2015.

The agency disclosed this in its latest quarterly report on the review and projections of the FAAC disbursements in 2016.

It said, “Previous issues of the NEITI quarterly review showed that disbursements in the first three quarters of 2016 were below the figures for the first three quarters of 2015. However, this trend was bucked in the fourth quarter of 2016, when disbursements climbed to N1.343tn, a nine per cent increase on the corresponding quarter of 2015.

“This slight improvement in disbursements in the fourth quarter of 2016 could be an indication that the decline in revenue accruing to the federation which has been observed since 2014 might be coming to an end.”

Explaining the trend in disbursements during the review periods, the agency said, “Total disbursements fell by 14.8 per cent from N6.011tn for 2015 to N5.121tn for 2016. There was a steady closing of the gap between total disbursements from the first quarter to the fourth quarter. In the first quarter of 2016, total disbursements were N1.132tn as against N1.648tn in the first quarter of 2015, a decline of 31.2per cent in the first quarter of 2016.

“Total disbursements fell by 26.9 per cent from N1.241tn in the second quarter 2015 to N906bn in the second quarter 2016. There was a further decline in the third quarter when total disbursements dropped by 7.8 per cent from N1.887tn in 2015 to N1.738tn 2016. However, total disbursements increased in the fourth quarter by 8.8 per cent from N1.233tn in 2015 to N1.343tn in 2016.”

It stated that although it was generally lower in 2016 than in 2015, the disbursements from FAAC to all tiers of government picked up in the second half of 2016.

This, it said, was largely due to the combined effects of rebound in oil prices and reduction in militant attacks on oil installations since the middle of 2016.

These two factors, according to NEITI, contributed to increased government take from the oil sector and this in turn translated into higher disbursements to all tiers of government.

In January this year, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, confirmed that the decline in vandalism had prompted a rise in electricity generation as gas supply to power plants had increased and urged vandals to maintain peace in order to sustain the growth.