The latest Fiscal Allocation and Statutory Disbursement (FASD) report recently published by the Nigeria Extractive Industries Transparency Initiative (NEITI) revealed that the Federal, State and Local Governments shared ₦19.01trillion mineral revenue between 2017 and 2019.
Breakdown showed that the Federal Government received the sum of N8.85 trillion while N5.80 trillion and N4.36 trillion were received by the 36 States and Local Governments respectively.
A comparison of allocation per geo-political zones reveals that south-south states received the highest allocation during the period under review in the sum of ₦5.17 trillion (26.54%) while southeast received the lowest allocation of ₦2.12 trillion (10.91%).
A state by state analysis of revenue allocations within the period under review shows that Delta state received the highest allocation of ₦1.24 trillion while Federal Capital Territory received the lowest allocation of ₦110 billion.
Findings on Nine Selected States
On the nine selected states covered by the exercise, the report revealed that their combined revenues inflows within the three years period were N5.104 trillion. Breakdown showed that statutory allocation accounted for N3.55 trillion, while internally generated revenue (IGR) and loans accounted for N1.33 trillion and N227 billion respectively.
Further breakdown shows that Delta state recorded the highest revenue of N1.083 trillion while Nasarawa state recorded the lowest revenue of N214 billion. The recurrent expenditure from the nine states was N2.89 trillion while capital expenditure and loan repayments were N2.059 trillion and N250 billion respectively.
From the report, Delta state received the highest allocation from FAAC during the three years under review with a total of N712.6Billion. Akwa Ibom State came second with over N677.76Billion while Nasarawa received the least inflows at N156.64Billion.
Bayelsa state was the most dependent on FAAC allocations, posting an average of 90% FAAC disbursement to the total revenue profile for the three years period. Ondo state posted the least dependence on FAAC allocations. Ondo state did not borrow in 2017 and 2018, but it borrowed over N17.8Billion in 2019.
Similarly, the report disclosed that Kano state stands out as the only state in the country that did not collect loans within the period under review, while Rives state collected the highest loan of N79.124 billion within the period.
NEITI report noted that that the nine selected states covered by the report were over reliant on revenues from the federation account by over 71%. It also noted that 81% of allocations to the states were used for recurrent expenditure.
Analysis of IGR per states shows that Rivers state generated the highest of sum of N344.38 billion within the three years period, while Imo state recorded the lowest amount of IGR of N35.006 billion within the period.
The report noted that despite the low IGR by the states as highlighted in the 2017-2019 FASD report, the states showed remarkable improvement when compared to their performance during the 2012-2016 FASD audit exercise, a positive sign that the states are gradually paying attention to their IGR potentials.
Recommendations:
NEITI report outlined salient observations and made far-reaching recommendations. It recommended greater synergy among government agencies and calls for prudent management of mineral revenues among the three tiers of government.
NEITI advocated for stringent measures to prevent funds from being utilized for purposes outside of their mandate. It called on the federal government to ensure that monthly transfers to the Nigerian Sovereign Investment Authority are done as at when due to ensure adequate savings for the country.
States should continue to innovate to improve their IGR potentials to guarantee future self-sufficiency and improve on their capital vote/expenditure to help close the infrastructural gaps in order to trigger private sector investments that will positively impact on the state’s macro-economic objectives.
The publication of FASD report is in fulfillment of the Nigeria’s obligation to the global Extractive Industries Transparency Initiative (EITI) and in compliance with the provisions of the NEITI Act 2007.
The transparency agency encouraged Nigerians especially the civil society and the media to use the information contained in the report for advocacy and accountability purposes to ensure prudent use and management of Nigeria’s extractive revenues and bring about sustainable development.
