The Nigeria Extractive Industries Transparency Initiative (NEITI) has released its quarterly report on Federation Account revenue allocations for the second quarter of 2024. The report reveals a slight increase in disbursements to the three tiers of government compared to the previous quarter.
According to NEITI, the Federation Accounts Allocation Committee (FAAC) distributed a total of N3.473 trillion to the federal, state, and local governments during the period under review. This represents a modest 1.42% increase from the N3.426 trillion disbursed in the first quarter of the year.
The Federal Government received N1.102 trillion, accounting for 33.35% of the total allocation. Thirty-six states shared N1.337 trillion (40.47%), while the 774 Local Government Councils received N864.98 billion (26.18%). Additionally, nine oil-producing states received N169.26 billion as their derivation share from mineral revenue.
NEITI Executive Secretary, Ogbonnaya Orji, emphasized the importance of transparency and accountability in public finance management. He stated, “The quarterly review aims to enhance knowledge, increase awareness, and promote public accountability in the management of public finances.”
Key Revenue Sources and Trends
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), and the Nigeria Customs Service were the primary contributors to the Federation Account. Their remittances included oil and gas royalties, petroleum profit tax, company income tax, value-added tax, and import & excise duties.
The report also highlighted a general upward trend in revenue allocations during the latter part of 2023 and early 2024. However, there was a slight decline in disbursements in March compared to February.
State and Local Government Allocations
Delta State emerged as the top recipient of allocations in Q2 2024, followed by Lagos State and Rivers State. Nasarawa, Ebonyi, and Ekiti States received the least. Among local governments, Alimosho in Lagos State secured the highest allocation, while Ifedayo received the smallest share.
Derivation Revenue and Debt Deductions
Nine states benefited from 13% oil derivation revenue, with Delta State leading the way. However, solid minerals-producing states did not receive derivation revenue due to insufficient revenue generation from the sector.
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Bauchi State recorded the highest debt deductions during the quarter, followed by Ogun State. Anambra State had the least deductions, while Lagos and Nasarawa recorded no debt deductions.
NEITI’s Recommendations
NEITI urged states to diversify their revenue sources by exploring opportunities in the solid minerals sector. The agency also recommended that the Central Bank of Nigeria stabilize the exchange rate and reduce fluctuations in Federation Account remittances.
Furthermore, NEITI advised states to adopt realistic budget benchmarks for oil production and exports to mitigate the impact of price volatility. The agency called on the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and the Office of the Accountant-General of the Federation to enhance transparency and accountability in public finance management.
NEITI also encouraged citizens and civil society organizations to actively participate in budget tracking and monitoring to ensure accountability in the allocation and disbursement of public funds.
