• News - North Central - FCT
  • Updated: September 01, 2023

FG, States Shared N4.37 Trillion FAAC Allocations In H1 2023 — NEITI

FG, States Shared N4.37 Trillion FAAC Allocations In H1 2023

The Nigeria Extractive Industries Transparency Initiative (NEITI) has released its latest report revealing that the Federal Government, States, and Local Government Councils (LGs) collectively received a total of N4.37 trillion from the Federation Account as statutory revenue allocations between January and June 2023.

The distributable FAAC allocations for the first and second quarters (Q1) of 2023 were N2.32 trillion and N2.04 trillion, respectively, according to Dr. Orji Ogbonnanya Orji, Executive Secretary of NEITI.

However, the NEITI quarterly review revealed a 23% loss in influxes into the Federation Account in Q2 of 2023, resulting in a 12% decrease in distributable revenue compared to the first quarter.

Each level of government received more than N1 trillion throughout the six-month period, according to the report.

About N1.78 trillion (40.7%) went to the federal government, N1.5 trillion (34.5%) to the states, and N1.08 trillion (24.8%) to local government councils.

According to the study, the distributable revenue increased by 16.7% during the corresponding quarters of 2022 and 2023, rising to N4.366 trillion in 2023 from N4.05 trillion in 2022.

The allocation to the Federal Government increased by 19.8% to N1.78 trillion, the allocation to the States climbed by 11.2% to N1.42 trillion, and the allocation to Local Government increased by 16.8% to N1.08 trillion.

Although allocations were generally higher in 2023, Q2 FAAC distribution fell by 13% compared to the same period in 2022, with total distributable revenue falling from N2.16 trillion to N2.02 trillion.

The report disclosed that Delta State was given the most money in Q2 2023, receiving N102.79 billion. Akwa Ibom came in second with N70.01 billion, followed by N69.73 billion for Rivers, N60.64 billion for Lagos, and N56.34 billion for Bayelsa.

The total allocations to the following 15 states were surpassed by the sum received by these five states.

The Federal Inland Revenue Service (FIRS), the Nigeria Customs Service (NCS), and other revenue-generating organisations sent remittances, which were reflected in the report as an upward trend in allocations.

Oil and gas royalties, petroleum profit tax, corporate income tax, value added tax, import taxes, and excise duties are a few of these sources of income.

By reducing import demands and subsequently lowering the dollar volume needed for premium motor spirit (PMS) payments, Nigeria's balance of payments might be strengthened by effectively managing the N3.6 trillion saved from subsidy payments in H1 2023.

Additionally, it approved the policy of unifying exchange rates to improve the stability of the economy and asked the Central Bank of Nigeria to give priority to measures that would stabilise foreign exchange-dependent inflows into the Federation Account.

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