An analysis by RipplesMetrics of the monthly Federal Allocation Account Committee allocation has shown a total of N3.53 trillion was disbursed to the 36 states and the Federal Capital Territory in 2023.
The allocation from the FAAC is a revenue disbursed to all tires of the government in financing the development of projects. As stipulated in Section 165 of the Constitution of the Federal Republic of Nigeria 1999 as well as the Allocation of Revenue (Federation Account, etc.) Act No.1 1982, all revenues generated by the Federal government should be credited into the Federation Account and disbursed monthly.
Findings showed that the amount received in 2023 is more than 28 per cent higher than what the states got in 2022 which was N2.76 trillion. This increase could be connected to the availability of funds after the removal of the fuel subsidy in May 2023, upon the assumption into office of President Bola Tinubu.
Two months after the removal, Tinubu said that the administration had saved up to N1 trillion in the government account. Between June and December 2023, the lowest amount disbursed to the states was N295.95 billion.
Also, the data gathered by RipplesMetrics shows that from June 2023 to December 2023, the average amount disbursed to all states was N317.58 billion monthly. This is more than the average amount disbursed to all the states monthly within the same period in the preceding year and the whole months in 2022.
With revenue from the federal government amounting to N3.53 trillion in one year, there are possible assumptions that most states relied on the FAAC allocation as the major source of their revenue in 2023. These speculations are hinged on the states pulling in sufficient internally generated revenue.
In 2022, the 36 states and FCT generated N1.93 trillion as IGR. Findings show that Lagos, Rivers, FCT and Ogun state pulling more than 50 per cent of the IGR for the year under review. RipplesMetircs reported how the 36 states and FCT generated N7 trillion as IGR between 2019 and 2022.
In 2023, the total allocation from FAAC was N15.98 trillion of which 22.09 per cent of the allocation was disbursed to the states. The average allocation disbursed every month to the states was N294.24 billion.
Despite the increase in FAAC allocation to the states, the percentage difference was lower compared to the previous month. With a FAAC disbursement of N11.69 trillion in 2022, 23.61 per cent of the allocation was disbursed to the respective states.
On quarterly analysis, the 36 states received a total of N785 billion in the first quarter of 2023. For the second and third quarters, N882.76 billions and N996.66 billion was shared. While N946.49 billion was allocated in the last quarter of 2023. This would mean that more allocation was given in the third quarter than in other quarters.
Within the year under review, the lowest amount received by the states was N232.13 billion in April, while the highest amount received by the states was N361.19 billion in September 2023.
By James Odunayo
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