In the first half of 2023, Delta, Akwa Ibom, and Rivers States received the largest share of Nigeria’s statutory Federation Account Revenue Allocations (FARA), as reported by the Nigeria Extractive Industries Transparency Initiative (NEITI) on Sunday.
Out of the total N4.37 trillion distributed among the three tiers of government from January to June 2023, the 36 states collectively received 34.5 percent, which amounted to approximately N1.51 trillion.
Specifically, the states received N817.79 billion from the N2.32 trillion allocations in the first quarter and N688.2 billion from the N2.04 trillion allocations in the second quarter. The decrease in overall allocation in the second quarter resulted in a 15.8 percent reduction in the states’ share compared to the first quarter.
Even with the reduction, the states’ allocations exceeded that of the federal government when the 13 percent derivation revenue was added. Additionally, the nine oil-producing states received extra allocations as part of the 13 percent derivation revenue, bringing their total receipts to approximately N869.09 billion.
Compared to the same period in 2022, the report showed an 11.2 percent increase in allocations to state governments in 2023, totaling N1.42 trillion.
In terms of individual states, Delta received the highest allocation of N102.79 billion in the second quarter, followed by Akwa Ibom and Rivers states, which received N70.01 billion and N69.73 billion, respectively.
“On a year-on-year basis, the report showed that when compared with the corresponding period in 2022, allocations to the state governments from the Federation Account in 2023 grew by about 11.2 per cent to N1.42 trillion from N1.26 trillion.
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“On a state-by-state basis, the report showed that Delta state received the largest allocation of N102.79 billion among the 36 states in the second quarter, followed by Akwa Ibom and Rivers states, which received N70.01 billion and N69.73 billion respectively,” the pro-transparency initiative said.
On the contrary, Ekiti, Ebonyi, and Nasarawa States received the lowest allocations of N16.95 billion, N16.84 billion, and N16.71 billion, respectively.
Regarding debt repayment, Lagos had the highest deduction from its allocation among the 36 states due to servicing foreign loans and contractual obligations, totaling N9 billion in the second quarter. Other states with significant deductions included Delta (N6.76 billion), Ogun (N6.10 billion), Kaduna (N5.63 billion), and Osun (N5.6 billion). Meanwhile, Enugu, Kebbi, Nasarawa, Anambra, and Jigawa States had the lowest deductions.
After all deductions, Delta State still had the highest net allocation of N96.03 billion, followed by Rivers (N66.81 billion), Akwa Ibom (N64.81 billion), Lagos (N51.61 billion), and Bayelsa (N51.53 billion).
However, Plateau, Ogun, and Osun States experienced negative revenue receipts in the second quarter due to debt deductions, causing their rankings among the states to drop significantly.
The report expressed concern over the high debt deductions in Ogun, Osun, and Cross River States, while it noted that Rivers, Jigawa, and Kebbi States exhibited strong fiscal sustainability.
Imo, Ekiti, Gombe, Kaduna, and Bauchi States had deductions that accounted for nearly a quarter of their gross allocations, according to NEITI.