The Nigerian Extractive Industry Transparency Initiative, NEITI, has revealed in its quarterly review that federal, states and local governments shared N2.788 trillion between January and June this year, a 38% increase on the N2.019 trillion shared in the first half of 2016.
NEITI said the review was based on data at the meetings of FAAC, the National Bureau of Statistics (NBS), Office of the Accountant General of the Federation, Federal Ministry of Finance and the Debt Management Office.
NEITI said in the report that out of N2.788 trillion disbursed in the first half of 2017, the Federal Government received N1.09 trillion, the 36 state governments N923 billion while N549.8 billion went to the 774 local governments in the country.
It was disclosed that total releases to the three tiers of government was N430.16 billion in January, N514 billion in February, N496.40 billion in March, N418.82 billion in April, N418.82 billion in May and N462.36 billion in June.
However, despite the 38% increase in disbursements in the first half of 2017 when compared with 2016, all the three tiers of government suffered significant revenue decline in terms of projected FAAC disbursement.
“Coupled with the low price of oil is the country’s difficulty in meeting the targeted/budgeted production rate of 2.2 million barrels per day. Production has consistently fallen below two million barrels per day since March 2016. Thus the double ‘whammy’ of low oil prices and lower production that hit the country since 2014 has remained,” the NEITI Quarterly Review observed.
For instance, while the expected FAAC disbursement for the three tiers of government was N4.7 trillion, the actual FAAC disbursement to them was N2.788 trillion, representing a shortfall of over 40.67%.
Moreso, the review showed that a total of N513 billion was spent on debt servicing by the three tiers in the first quarter of 2017. This was against the N1.276 trillion disbursements in the first quarter. This means that debt servicing took up 40.27% of FAAC disbursement for the first quarter of this year.
“The figure reveals that debt servicing as proportion of total FAAC allocations is generally higher in the first quarter of the year, after which it falls to lower levels,” the report concluded.