Home Business N1.5trn shared in three months-NEITI

N1.5trn shared in three months-NEITI

by Business News Report

Nigeria Extractive Industries Transparency Initiative, NEITI, said that Federal, states and the local government councils got a total of N1.534 trillion as allocations from the Federation Account Allocation Committee (FAAC) for the months of July, August and September 2016.

NEITI, in its Quarterly Review on disbursement thenthree tiers of government in the country said that the figure for the third quarter of 2016 is a major improvement over what was shared in the first and second quarters of 2016.
NEITI attributed the improvement in revenue in the third quarter to the rally in the price of crude oil, the improvement in oil production as a result of reduction in militant activities in the Niger Delta region, and gains from adjustment in the exchange rate.
Giving a breakdown of the allocations, NEITI said that the Federal Government received N697.9 billion; states got N512.66 billion; and local government areas collected N324.31 billion.

According to the report, the major spike was in July, when the three tiers of government shared N546.62 billion as against the N304.91 billion shared in June, an increase of 79 per cent.
However, NEITI explained that the July trajectory was not sustained as revenues to the three tiers of government dipped to N486.02 billion in August but increased marginally to N502.23 billion in September, a dip of 11 per cent and 8.12 per cent respectively on the July figure.
It said, “Nevertheless, a different picture of dwindling allocations emerges when the FAAC disbursements for the third quarter of 2016 are compared to those of the third quarter of 2015. The federal government receipt in the third quarter of 2016 was N129.9 billion less than what it received in the corresponding period in 2015; while the states and the local government areas received N72.1 billion and N48.5 billion less respectively.
“However, a closer review of the non-oil revenue disbursements to the three tiers of government for the three quarters of 2016 showed a marginal increase over the same period in 2015.”
However, it stated that the third quarter figure is still a significant dip when compared to the amount shared in the third quarter of 2015, indicating that government allocations are improving even when the 2016 figures still lag behind the corresponding ones for 2015.
It said, “This increase in government revenue portends well for the execution of budgets that have been constrained since the beginning of the year as a result of the drastic fall in FAAC disbursements,” states the NEITI Quarterly Review, which was introduced in September 2016 to provide analytical review of issues around management of revenues from Nigeria’s extractive sector.
“Thus, as was revealed in the previous edition of this Review, lower revenue is being channeled into the Federation Account. Cumulative FAAC disbursements to States for first quarter to third quarter 2016 are substantially lower than the 2016 budgets for all States.
“Even though the states will still receive disbursements for fourth quarter and they also receive inflows from Internally Generated Revenue, IGR, it is highly unlikely these will be sufficient enough to offset the big gap between expenditure and revenue.
“This suggests that many States will incur heavy budget deficits and they will not be able to effectively implement their budgets for the year. Exceptions are states which sufficiently generate IGR — Lagos, Rivers, Delta states.”

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