The Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that the Federation Accounts Allocation Committee (FAAC) distributed a record-breaking N15.26 trillion to the federal, state, and local governments in 2024. This marks a 43% increase compared to previous years, according to the NEITI FAAC Quarterly Review released on Tuesday in Abuja.
The surge in revenue disbursements is attributed to the Federal Government’s fiscal reforms, including the removal of fuel subsidies and adjustments to foreign exchange rates. These measures have significantly boosted oil revenue remittances, which have been a key driver of the increased allocations.
Dr. Orji Ogbonnaya Orji, Executive Secretary of NEITI, emphasized the importance of assessing the sustainability of borrowing by federal and state governments to fund projects. He also highlighted the implications of natural resource dependence, particularly for states benefiting from the 13% derivation revenue from oil, gas, and solid minerals.
Breakdown of Allocations
– **Federal Government**: Received N4.95 trillion, a 24% increase from N3.99 trillion in 2023.
– **State Governments**: Received N5.81 trillion, marking a 62% rise from N3.58 trillion in 2023.
– **Local Governments**: Received N3.77 trillion, a 47% increase from the previous year.
Total FAAC disbursements, including derivation revenue, amounted to N15.26 trillion, reflecting a 66.2% increase from N9.18 trillion in 2022 and N10.9 trillion in 2023.
State-by-State Allocation Analysis
– **Top Recipients**: Lagos State received the highest allocation of N531.1 billion, followed by Delta (N450.4 billion) and Rivers (N349.9 billion).
– **Lowest Recipients**: Nasarawa State received the least allocation of N108.3 billion, trailed by Ebonyi (N110 billion) and Ekiti (N111.9 billion).
Six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, accounting for 33% of total allocations. In contrast, the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5% of total allocations.
Debt Deductions and Fiscal Risks
The report also highlighted significant debt deductions for states’ foreign debts and other obligations, totaling N800 billion. This represents 12.3% of total allocations to the 36 states, including derivation revenue. Lagos State recorded the highest debt deduction of N164.7 billion, followed by Kaduna (N51.2 billion), Rivers (N38.6 billion), and Bauchi (N37.2 billion).
Dr. Orji urged governments at all levels to adopt innovative measures to address economic and social risks associated with the reforms, such as inflationary pressures, rising debt servicing costs, and fiscal uncertainties for oil-dependent states. He stressed the need for sustainable revenue growth, job creation, poverty reduction, and inflation control.
The NEITI FAAC Review called for leveraging the findings to hold governments accountable for the effective management of public resources, particularly revenues from the extractive industries. Dr. Orji emphasized the importance of sustained policy reforms to ensure economic stability and long-term growth.
As Nigeria navigates these fiscal changes, the NEITI report serves as a critical tool for transparency and accountability in the management of the nation’s resources.
