Government revenues in Nigeria have gone down by over 40 percent in the last three years, as the Federation Accounts Allocation Committee (FAAC) disbursed N5.12 trillion to the three tiers of government in 2016, contrary to N6.01 trillion it shared among them in 2015.
The figure is also 15 percent short of disbursements in 2015 alone and over 40 percent less than aggregated disbursements to the three tiers of government in the country between 2013 and 2016.
This was contained in the latest quarterly review released Thursday by the Nigeria Extractive Industries Transparency Initiative (NEITI) titled “FAAC Disbursements in 2016: Review and Projections.”
The Review, which is the third in the series, focused on disbursements from the federation account to the federal, state and local governments, appraising internally generated revenues of the states in 2016 and their capacity to fund budgets.
The review noted that payments to the three tiers of government have continued to decline by over 40 percent since 2013, and that the Federal Government received N3.711 trillion in 2013, which then fell by 43.9 percent to N2.08 trillion in 2016.
Similarly, disbursements to state governments totaled N3.095 trillion in 2013, while in 2016, they received N1.642 trillion, representing a 46.9 percent decline relative to the 2013 figures.
On their part, local governments received N1.011 trillion in 2016, over 40 percent lower than the figure of N1.708 trillion received in 2013.
On disbursements to the federal government in 2016, the NEITI publication disclosed that the total FAAC allocations stood at N2.08 trillion as against the N6.06 trillion that the federal government budgeted for the year.
This represents a drop of 20 percent when compared to the 2015 figure of N2.6trillion.
The payment covered just about 34 percent of the budget and was not even enough to meet the recurrent expenditure needs of N2.6 trillion of the Fedral Government in 2016.
The implication according to the NEITI publication is that “the Federal Government would resorted to even higher debts to fund the budget, and that debt service payments, which accounted for 24.3 percent of the 2016 budget, will increase.
NEITI further revealed that revenues accruing to the state governments fell short of their budgets projections, with some as much as 30 percent.
These disbursements comprise of gross statutory allocation, 13 percent share of derivation, Value Added Tax, distribution of exchange gain, NLNG dividend, distribution of excess bank charges recovered, and distribution of solid minerals revenue.
The report cited some states like Lagos which had a budget of N662.60 billion against the total revenue of N410.5 billion that accrued to the state, leaving a shortfall of about N252 billion.
On the other hand, Adamawa State had revenue of N41.05 billion against a budget of N130.10 billion while, Nasarawa had revenue of N32.5 billion to fund a budget of N77.30 billion.
Also, some states, such as Cross River, Sokoto, Borno, Jigawa, Osun and Plateau had revenues below 30 percent of their budgets in 2016.
Akwa Ibom state received the highest allocation of N116.6 billion from the federation account in 2016 and was closely followed by Lagos and Rivers States with N109.3 billion and 103.98 billion respectively.
The NEITI report also showed that Kwara and Ebonyi states received the least allocations of N30.08 billion and 30.09 billion respectively from the federation account.
Disparities in total disbursements to state and local governments were also highlighted in the report, where three states received disbursements above N100 billion each, while 30 states received allocations less than half of that figure (N50bn) in 2016.
On disbursements to the 774 local governments in Nigeria, Lagos State topped the table with a total of N69.29 billion to its 20 local governments, followed by Kano’s 44 local governments with a total of N56.16 billion, while Bayelsa received the lowest disbursement of N11.56 billion for its 8 local governments.
In terms of internally generated revenue (IGR), only the two states of Lagos and Ogun had IGR in excess of FAAC allocations received by them.
NEITI also noted with concern that the debt profiles of the state governments were on the increase as at December 2015 and June 30, 2016.
For instance, Lagos State has the highest cumulative debt of N603.25 billion as against the state’s revenue of N410.5 billion in 2016.
The second on the debt table is Delta State, with N331.95 billion growing debt as against N142.78 of its IGR, while Osun and Akwa Ibom States took the third and fourth places with N165.91 billion and N161.23 billion respectively.
Yobe and Anambra States made it as states with the least debt burdens because, while Yobe was indebted to the tune of N11.74 billion, Anambra State owed N20.60 billion.
The cases of Osun, Cross River and Delta States particularly raised major concerns, given the fact that their total borrowings over the years under review were more than double the total revenues accruing to them in 2016.
