FAAC Allocations Rose by 43% in 2024 – NEITI
The Nigeria Extractive Industries Transparency Initiative (NEITI) report said the Federation Accounts Allocation Committee (FAAC) disbursed an unprecedented N15.26 trillion to the federal, state, and local governments in 2024.
The NEITI FAAC Quarterly Review, released by NEITI on Tuesday in Abuja showed that the disbursements represented a historic high in revenue distribution and a 43 per cent increase, compared to previous years.
It attributed the surge in revenue disbursements to Federal Government’s sustained fiscal reform policies, especially the fuel subsidies removal and foreign adjustment exchange rate policies, which had continued to impact positively on oil revenue remittances.
Announcing the report, Dr Orji Ogbonnaya Orji, the Executive Secretary, NEITI, said the analysis were conducted against the backdrop of major fiscal reforms that reshaped the revenue landscape, particularly subsidy removal impacts on national and subnational finances.
“The report’s objective is to assess the sustainability of the federal and state tate governments’ borrowing to fund their projects and programmes.
“As well as the implications of natural resource dependence, particularly for states benefitting from the 13 per cent derivation revenue from oil, gas, and solid minerals.
“The analysis focused on crude oil revenue derivation states, as solid minerals continue to underperform despite their significant potential,” he said.
Orji said the federal received N4.95 trillion, state governments, N5.81 trillion, and local governments N3.77 trillion during the period. According to him, the total FAAC Disbursements (including Derivation Revenue) is N15.26 trillion.
“The NEITI FAAC Quarterly Review showed that distribution to state governments in 2024 recorded the largest percentage increase of 62 per cent from N3.58 trillion in 2023, followed by local government councils with a 47 per cent increase.
“The Federal Government’s share rose by 24 per cent from N3.99 trillion in 2023 to N4.95 trillion in 2024.
“The report highlights that total FAAC allocations increased by 66.2 per cent from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024, with the most significant growth occurring between 2023 and 2024,” he said.
He said NEITI would continue to support the reforms with credible information and data. Orji said the review called for adequate measures to manage and mitigate economic and other social risks associated reforms in transitional economies like Nigeria.
He outlined such risks to include, inflationary pressure, possible rise in debt servicing costs and fiscal uncertainties for states dependent on oil revenues.
He recommended that governments at all levels should take innovative actions to mitigate the impact of these economic challenges.
“The report also revealed that the Lagos State received the highest allocation of N531.1 billion in 2024, followed by Delta (N450.4 billion) and Rivers (N349.9 billion.
“Conversely, Nasarawa State received the least allocation of N108.3 billion, followed by Ebonyi (N110 billion) and Ekiti (N111.9 billion).
“Furthermore, six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33 per cent of total allocations to all states.
“While the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—accounted for only 11.5 per cent.
“The report revealed a major financial divide, with Lagos, Delta, Rivers, and Akwa Ibom—collectively receiving N1.49 trillion, over three times more than the combined total of the bottom four states—Kwara, Ekiti, Ebonyi, and Nasarawa—which received N442.4 billion.
“The review highlighted that total debt deductions for states’ foreign debts and other contractual obligations amounted to N800 billion, representing 12.3 per cent of total allocations to the 36 states, including derivation revenue,” he said.
He said Lagos State recorded the highest debt deduction of N164.7 billion, accounting for over 20 per cent of total deductions.
He said Kaduna State followed with N51.2 billion, while Rivers (N38.6 billion) and Bauchi (N37.2 billion) also recorded significant debt deductions.
He urged the government to sustain policy reform measures to encourage sustainable revenue growth and economic stability with priority attention focussed on job creation, poverty reduction and control of inflation on goods and services.
The NEITI FAAC Review reiterated the need for stakeholders to leverage the findings and data provided to hold all levels of government accountable for effective management of public resources, especially revenues from the extractive industries. #FAAC Allocations Rose by 43% in 2024 – NEITI#
