FAAC disbursements to FG, states, LG jumps by 43% to N15tr in 2024

Acting Director Communication & Stakeholders Management, the Nigerian Extractive Industry Transparency Initiative (NEITI), Obiageli Onuorah, who quoted from the newly released FAAC Quarterly Review in Abuja on Tuesday, said the committee disbursed N15.26 trillion to the three tiers of government in the year under review.

She noted that the disbursements represent a historic high in revenue distribution and a 43% increase compared to previous years.

The quarterly Review attributed the surge in revenue disbursements to sustained  fiscal reform policies of the Federal Government especially the removal of fuel subsidies and foreign adjustment exchange rate policies which have continued to impact positively on oil revenue remittances.

Announcing the report’s release in Abuja, Dr Orji Ogbonnaya Orji, Executive Secretary of NEITI, noted that the analyses were conducted against the backdrop of major fiscal reforms that reshaped the revenue landscape, particularly the impact of subsidy removal in mid-2023 on national and subnational finances and the consequences of debt repayment deductions on state allocations.

According to Dr Orji, the report’s objective is to assess the sustainability of the federal and state governments’ borrowing to fund their projects and programmes, as well as the implications of natural resource dependence, particularly for states benefitting from the 13% derivation revenue from oil, gas, and solid minerals.

He added, “The analysis focused on crude oil revenue derivation states, as solid minerals continue to underperform despite their significant potentials.”

NEITI listed the breakdown of disbursements to include: Federal Government: N4.95 trillion;

State Governments: N5.81 trillion; Local Governments: N3.77 trillion, stressing that the total FAAC disbursements (Including Derivation Revenue) stood at N15.26 trillion.

The NEITI FAAC Quarterly Review showed that distribution to state governments in 2024 recorded the largest percentage increase of 62% from N3.58 trillion in 2023, followed by local government councils with a 47% increase, while the Federal Government’s share rose by 24% from N3.99 trillion in 2023 to N4.95 trillion in 2024.

The report highlights that total FAAC allocations increased by 66.2% 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.