36 states, FCT receive N2.58 trillion as allocation in nine months

Between January and September, a total of N11.48 trillion was disbursed as allocation from the Federation Account Allocation Committee (FAAC) to all three teiers of government.

Data from the National Bureau of Statistics showed that the disbursement which was more than a trillion in the first two months of the year decreased between March and May 2023.

However, further findings revealed that after the removal of the fuel subsidy in May, the disbursement increased. The disbursement was reported in July with N1.89 trillion shared among the three tiers of governments in the country.

The FAAC disburses allocations from the revenues generated into the Federations Accounts, which comprise multiple accounts specific to an RGA or a sector/ business type. The total revenue generated is pulled from statutory accounts, non-oil revenue, exchange gain, Electronic Money Transfer Levy and Value Added Tax.

The total revenue is shared among the three tiers of government, Federal, State and Local.

Recall that in May 2023, President Bola Tinubu, during his inauguration announced the removal of fuel subsidy. Before this, the Nigerian National Petroleum Company Limited Chief Executive Officer, Mele Kyari, disclosed that Nigeria spends N400 billion monthly on subsiding fuel.

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Several reports by RipplesMetrics have captured the impact of the removal on the country’s economy. However, the removal of the subsidy means that the fund would be used to support states and local governments in providing development in respective localities.

For this report, RipplesMetrics reviewed the total amount disbursed and the findings showed that within nine months, N2.58 trillion was disbursed to all 36 states and the Federal Capital Territory.

This amount represents 22.47 per cent of the total amount disbursed within the nine months.

Breaking down the data

In January, a total of N1.44 trillion was disbursed to the three tiers of government of which the states received N299.56 billion. Similarly, in February, N1.03 trillion was shared of which the states received N248.98 billion; while in March, the states received N236.46 billion of the total N860.04 billion shared.

In April and May 2023, the FAAC shared dropped to N872.55 billion and N976.34 respectively. The 36 states and FCT received N232.13 billion and N290.71 billion respectively.

After the removal of the fuel subsidy in May, while FAAC disbursement increased, the allocation of the state also increased.

In June, a total of N1.13 trillion was shared with the tires of governments of which the states got N299.92 billion. Also, In July N1.89 trillion was shared of which the states received N295.95 billion; while in August, the states received N319.52 billion of the total N1.80 trillion shared. In September, the FAAC disbursed N1.48 trillion as allocation while the states got N361.19 billion.

Despite this heavy disbursement, there are concerns that most states are dependent on FAAC and not the internally generated revenue of the states. RipplesMetrics had reported how most states the 36 states and the FCT recorded a total of N7.02 trillion as internally generated revenue.

A report by BudgIT reveals that five states—Abia, Imo, Yobe, Zamfara, and Plateau—did not raise enough total revenue (their combined IGR, federal allocations, and grants) to cater to their recurrent expenditure. This means that these states resorted to borrowing to manage some parts of their recurrent and capital expenditures.

By James Odunayo

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