The Nigeria Extractive Industries Transparency Initiative (NEITI) has announced that a total of N3.473 trillion was disbursed by the Federation Accounts Allocation Committee (FAAC) to the three tiers of government in the second quarter of 2024. This reflects a 1.42% increase of N46.77 billion compared to the first quarter of the year.

In a statement released on Monday, NEITI’s Assistant Director, Communications and Advocacy, Chris Ochonu, revealed that the information is part of the agency’s latest Quarterly Report on Federation Account Revenue Allocations for Q2 2024.

During the report’s unveiling in Abuja, NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, emphasized that the report seeks to shed light on the sources of funds into the Federation Account and analyze factors that influence revenue fluctuations over time.

“The Quarterly Review aims to enhance knowledge, increase awareness, and promote public accountability in the management of public finances,” Dr. Orji stated.

Breakdown of Disbursements

Of the total allocation, the Federal Government received N1.102 trillion, accounting for 33.35% of the disbursement. The 36 state governments shared N1.337 trillion (40.47%), while the 774 local government councils received N864.98 billion (26.18%). In addition, nine oil-producing states were allocated N169.26 billion as their derivation share from mineral revenue.

Comparing Q2 with Q1 Allocations

The report noted a decrease in the Federal Government’s share by N41.44 billion (3.76%) compared to Q1 2024. Conversely, state governments saw an increase of N58.13 billion (4.29%), and local government councils experienced a rise of N30.82 billion (3.57%).

The main revenue-generating agencies contributing to the Federation Account included the Nigeria Upstream Petroleum Regulatory Commission, Federal Inland Revenue Service, and the Nigeria Customs Service. Key revenue sources were oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import & excise duties.

State and Local Government Allocations

Among the states, Delta received the largest allocation in Q2 2024, with N137.36 billion, followed by Lagos (N123.28 billion) and Rivers (N108.10 billion). Nasarawa, Ebonyi, and Ekiti received the least, with N24.73 billion and N25.40 billion, respectively.

For local governments, Lagos’ Alimosho received the highest allocation of N5.72 billion, followed by Ajeromi/Ifelodun (N4.59 billion) and Kosofe (N4.54 billion). Ifedayo received the smallest share, with N661.82 million.

Oil Derivation and Debt Deductions

The report highlighted that Delta State led the nine oil-producing states in derivation revenue, receiving 40.15% of the allocation, followed by Bayelsa (38.11%) and Akwa Ibom (36.12%). Solid minerals-producing states did not receive derivation revenue in Q2 due to insufficient revenue generation.

Bauchi recorded the highest debt deductions at N6.49 billion for Q2, followed by Ogun State, while Anambra had the least deductions at N115.6 million. Lagos and Nasarawa States had no debt deductions.

Recommendations

NEITI urged states to capitalize on ongoing reforms in the solid minerals sector to diversify their revenue streams. The report also called on the Central Bank of Nigeria to stabilize the exchange rate and minimize fluctuations in Federation Account remittances.

The Revenue Mobilisation Allocation and Fiscal Commission and the Office of the Accountant General were also urged to improve transparency in managing special revenue accruals like derivation arrears and debt repayment refunds.

Dr. Orji concluded by encouraging citizens and civil society organizations involved in revenue and expenditure monitoring to strengthen their capacity in budget tracking and monitor allocations and disbursements to ensure accountability.