The three tiers of government, the Federal, States and Local Government Areas shared the total sum of N10.143 trillion from the Federation Account as statutory revenue allocations in 2023, the Nigeria Extractive Industries Transparency Initiative, NEITI, has reported.
The report released yesterday 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 of the Federation shared 2.56 trillion equivalent to 25.28 percent.
NEITI disclosed that 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 the corresponding year 2022.
NEITI attributed the increase to improved revenue remittances to the Federation Account due to the removal of petrol subsidy and the floating of the exchange rate by the new administration.
It stated that while total revenues distributed from the Federation Account recorded an overall increase of 23.56 percent in 2023, the increase accruing to each tier of government varied, largely due to the type of the revenue streams contributing to the inflows into the Federation Account.
It disclosed further 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%) when compared to the first quarter of 2022. The second quarter increased 10.32%, third quarter by 27.49% while the fourth quarter had an increase of 23.42% respectively.
NEITI added the Federal Government’s share increased by N574.21 billion (16.79%) 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%. Similarly, local government councils’ share of federation allocation was N2.57 trillion in 2023 compared to N2.032 trillion in 2023 which amounts to a 26.22% increase.
State by state share of the allocations showed that Delta State received the largest share of N402.26 billion (gross).
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“The figure is inclusive of the state’s share of oil and gas derivation revenue. Delta was followed by Rivers State which received N398.53 billion. Akwa-Ibom State received the third largest allocation of N293.58 billion”, it stated.
The report stated that the Nasarawa State received the least amount of N73.32 billion while Ebonyi and Ekiti states received N73.91 billion and N74.04 billion respectively.
A statement by NEITI in Abuja explained that its Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, who announced the release of the report, said that the agency embarked on the NEITI FAAC Quarterly Review to enhance public understanding of Federation Account allocations and disbursements as published by the government.
He explained further that “the ultimate objective of this disclosure is to strengthen knowledge, awareness and promote public accountability of all institutions in public finance management”.
The report also showed that revenue remittances to the Federation Account fluctuated significantly on a monthly basis due to corresponding fluctuations in oil and gas revenue.
“Oil and gas revenues reflected crude oil prices and Nigeria’s output which in turn is significantly affected by crude oil theft and acts of sabotage”.
The agency stressed that the main sources of revenue inflows to the Federation Account in 2023 were the Nigerian Upstream Petroleum Regulatory Commission, Federal Inland Revenue Service and Nigeria Customs Service, through earnings from the different revenue streams. This included oil, gas royalties, petroleum profit tax, company income tax, value added tax, import and excise duties.
