Subsidy removal: FG, 36 states, 779 LGs shared jumbo N10.14trn in 2023, says NEITI

The three tiers of government – Federal, state, and local governments – shared N10.143 trillion from the Federation Account as statutory revenue allocations in 2023, according to the Nigeria Extractive Industries Transparency Initiative (NEITI).

The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, stated this in a report on the Federation Account revenue allocations for the year 2023 released in Abuja on Tuesday.

According to the report, the purpose of the NEITI FAAC Quarterly Review was to improve public understanding of government-published Federation Account allocations and disbursements.

“The ultimate objective of the report was to strengthen knowledge, raise awareness, and promote public accountability for all institutions in public finance management.”

The report also said a breakdown of the revenue receipts showed that the federal government received N3.99 trillion, representing 39.37 percent of the total allocation.

“The 36 states got N3.585 trillion, representing 35.34 percent, while the 774 local government councils shared N2.56 trillion, equivalent to 25.28 percent.

“A further analysis of the N10.143 trillion disbursements in 2023 showed an increase of N1.934 trillion, or 23.56 percent, when compared to the disbursement of N8.209 trillion shared in 2022.

“The review attributed the increase to improved revenue remittances to the Federation Account due to the removal of petrol subsidies and the floating of the exchange rate by the new administration.

“The report highlighted that while total revenues distributed from the account recorded an increase of 23.56 percent in 2023, the increase accruing to each tier of government varied due to the type of revenue streams contributing to the inflows into the Federation Account.”

It is also revealed that the federal, states, and local governments cumulatively received N1.934 trillion more than the amount shared in 2022.

The first quarter of 2023 increased by N579.71 billion (33.19 percent) when compared to the first quarter of 2022, while the second, third, and fourth quarters increased by 10.32 percent, 27.49 percent, and 23.42 percent, respectively.

“The Federal Government’s share increased by N574.21 billion (16.79 percent) from the N3.42 trillion it received in 2022 to N3.99 trillion in 2023.

“The state governments shared N3.59 trillion in 2023 compared to the N2.76 trillion they got in 2022, showing an increase of 29.99 percent.

“Similarly, local government councils’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in 2022, which amounts to a 26.22 percent increase, while total distributed revenue from the Federation account recorded an increase of 23.56 percent in 2023,” it said.

The report said the increase that accrued to each tier of government varied, largely due to the type of revenue item that contributed to the inflows into the Federation Account.

“In the same period (2023), states and local governments recorded increases in their allocations of 29.99 percent and 26.22 percent, respectively.

“The increase in allocation to the Federal Government, however, was 16.79 percent.

State-by-state share of the allocations showed that Delta State received the largest share of N402.26 billion (gross), followed by Rivers, which received N398.53 billion.

The figure is inclusive of the state’s share of oil and gas derivation revenue.

“Akwa-Ibom State received the third largest allocation of N293.58 billion, Nasarawa State received the least amount of N73.32 billion, while Ebonyi and Ekiti states received N73.91 billion and N74.04 billion, respectively.

“The review observed that the first five states that topped the allocation during the period under review are among the major oil-producing states in the country.”

On the share of 13 percent derivation revenue, nine states received the 13 percent allocated to mineral-producing states from the proceeds of mineral revenue.

“The derivation revenue remains a significant portion of revenue for states like Delta, Akwa Ibom, Anambra, and Rivers states.

“Also, the derivation revenues of states such as Delta, Akwa Ibom, and Bayelsa, which were 161.47 percent, 141.25 percent, and 127.89 percent, respectively, eclipsed their statutory revenues.

“Rivers State’s derivation revenue was 74.15 percent during the period. Notably, the other five oil-producing states recorded lesser derivation revenue compared to the four above.

“For example, Ondo State had 27.71 percent, Edo had 30.04 percent, while Abia, Anambra, and Imo recorded a derivation revenue of about 20 percent or less,” it said.

The NEITI report noted that solid minerals-producing states did not receive derivation revenues during the last quarter of 2023 because of the need to allow revenues to accumulate over a period of time before sharing.