Disbursements From FAAC In 2019 Highest Since 2013 As FG And Others Share N8.147 Trillion

The NEITI Quarterly Review reported that the sum of N8.15 trillion was shared between the Federal, States, Local governments and other statutory recipients in 2019, and this has made the 2019 disbursements the fourth highest since 2013.Notably, the 2019 disbursement is N377billion or 4.42% lower than the 2018 figure of N8.524trillion, but N1.728trillion or 26.92% higher than the total disbursements of N6.419trillion made in 2017. A review of the FAAC 2019 disbursement also revealed that the Federal Government received the highest disbursements (N3.37 trillion or 41.4% of the total disbursements), followed by the 36 states which got N2.761 trillion (33.9%) and the 774 local governments that shared N1.649 trillion (20.2%).

The report further disclosed that revenue shared to the three tiers of government in the two previous years 2018 and 2017 followed the same pattern: “For 2018, total disbursements to FG, states, and local governments were N3.483 trillion, N2.850 trillion, and N1.667 trillion, respectively. For 2017, disbursements were N2.563 trillion to FG, N1.859 trillion to states, and N1.502 trillion to local governments”.According to the report Osun and Cross River states had the lowest allocation of N24.14billion and N36.22Billion respectively, while Delta State received the highest disbursement of N218.58 billion. Four states of the Niger Delta Region and Lagos were among the states that received over N100billion from FAAC 2019 allocations. This development was attributed to the 13% derivation principle.

 

In relation to deductions from states’ allocations, the NEITI publication stated that Yobe State had the lowest deductions of N2.16 billion while Lagos State had the highest - N44.45 billion. It was also noticed that the two states with the lowest net disbursements (Osun and Cross River) had the highest deductions (N27.19 billion and N18.55 billion respectively) after Lagos State. Deductions for most states (22 of them) were reportedly below N10 billion. The above developments are certainly not without implications, especially for some states. For example, 21 states were reportedly not able to service their recurrent expenditure through the FAAC net disbursements during the year in question. Besides, the NEITI report compared the total revenue accruable to each state of the federation to their respective budgets and concluded that “Even with the addition of Internally Generated Revenue (IGR) to FAAC disbursements, no state can independently finance its budget. Thus, all states would be faced with the option of either not fully implementing their budgets or borrowing to achieve this”.