By Michael Eboh
The Nigeria Extractive Industries Transparency Initiative, NEITI, Tuesday, disclosed that the Federation Account Allocation Committee, FAAC, disbursed a total of N2.054 trillion to the three tiers of government and other statutory recipients in the third quarter of 2020.
In a statement in Abuja, NEITI noted that despite COVID-19 pandemic and its attendant socio-economic consequences, the amount disbursed in the third quarter of 2020 was 6.2 per cent higher than the N1.934 trillion disbursed in the second quarter of 2020 and 5.6 per cent higher than total disbursements of N1.945 trillion in first quarter 2020.
However, NEITI, in its Quarterly Review on FAAC Disbursements, disclosed that the amount shared by the FAAC in third quarter 2020 were lower than those of the corresponding quarters in 2019 and 2018 as a whole and to the three tiers of government.
According to NEITI, third quarter 2020 disbursements were 9.6 per cent lower than the N2.273 trillion disbursed in the third quarter of 2019 and 9.8 per cent lower than the N2.278 trillion disbursed in the third quarter of 2018.
Giving a breakdown of the disbursements, NEITI stated that the Federal Government received N812.22 billion; state governments received N676.5 billion while local government areas got N429.16 billion, adding that this was the first time that total disbursement exceeded N2 trillion for a quarter in 2020.
It noted that the Federal Government of Nigeria, FGN, received N812.22 billion in the third quarter of 2020, which was 11.7 per cent lower than the N920.2 billion and 10.2 per cent lower than the N904.8 billion the FGN received in the third quarters of 2019 and 2018 respectively.
The states on the other hand, NEITI noted, received a total of N676.5 billion in the third quarter of 2020, showing a decrease of 6.6 per cent when compared to the N724.16 billion they got in the third quarter of 2019, and 5.9 per cent lower than the N718.5 billion they received in the third quarter of 2018.
The local governments, it added, got a total of N429.16 billion in third quarter 2020, 9.6 per cent lower than the N441.19 billion they got in similar period in and 9.8 per cent lower than the N432.1 billion they received in similar period in 2018.
It said: “The dip in disbursements between 2020 Q3 and corresponding quarters in 2019 and 2018 was largely on account of the impact of COVID-19 and its associated effects on demand for oil, oil prices, economic activities and other sources of revenues.
“Further analysis reveals that disbursements to the three tiers of government fell between the first and second quarters, and then increased between the second and third quarters of 2020.
“Total disbursements to the FGN were N791.44 billion, N739.2 billion and N812.22 billion for the first, second and third quarters of 2020, respectively. This means that disbursements in the third quarter were 9.9 per cent higher than disbursements in the second quarter, and 2.6 per cent higher than disbursements in the first quarter.”
Continuing, the transparency agency said: “For states, total disbursements were N669.02 billion in the first quarter, N629.26 billion in the second quarter, and N676.5 billion in the third quarter. Thus, disbursements to states in third quarter 2020 were 7.5 per cent higher than disbursements in second quarter 2020, and 1.1 per cent higher than disbursements in first quarter 2020.
“Local governments received total of N395.95 billion in first quarter 2020, N375.39 billion in the second quarter of 2020, and N429.16 billion in third quarter 2020. Thus, the disbursements to local governments in third quarter 2020 were 14.3 per cent higher than the amount disbursed in second quarter 2020, and 8.4 per cent higher than the disbursements in first quarter 2020.”
On FAAC disbursements to states in third quarter 2020, NEITI noted that there was wide disparity in the total net disbursements, ranging between the lowest of N9.39 billion net disbursements to Osun State and the highest of N43.08 billion net disbursements to Delta State, indicating a variance of 358 per cent.
According to NEITI, apart from the sharing formula, the amount of deductions carried out also plays a role in determining how much net disbursements are received by states.
It said: “Yobe State had the lowest deduction of N81.98 million, whileLagos State had the highest deduction of N17.35 billion, which was 10 per cent higher than the combined total deductions of 20 states (N15.72 billion).
“The review further revealed that the combined disbursements of the four states with the highest disbursements (Delta, Rivers, Lagos and Akwa Ibom states) amounted to N144.48 billion. This was higher than the combined total of N135.36 billion received by the 12 states with the lowest disbursements (Osun, Cross River, Plateau, Ogun, Ekiti, Gombe, Zamfara, Kwara, Nasarawa, Ebonyi, Taraba & Ondo).”
On the revenue outlook for fourth quarter 2020, NEITI projected that actual oil revenue was likely to continue to outperform the projected oil revenue for the fourth quarter of 2020.
However, it cautioned that even with projected improvement in revenues in fourth quarter 2020, and based on the total revenues received in the first three quarters of 2020, all tiers of government may struggle to meet the revenue projection in their revised budgets for the year.