FAAC: Q2 Allocations Up 46%

Director, Communications and Advocacy, NEITI, Dr Ogbonnaya Orji

 

Total Federation Accounts Allocation Committee disbursements in the second quarter of the year to the three tiers of government rose by 46 per cent compared to the corresponding period in 2017 driven by the increase in the price of crude oil.

While N2 trillion was shared in the second quarter of 2018, N1.38 trillion was disbursed during the same period last year, the second quarter report of the Nigerian Extractive Industry Transparency Initiative NEITI) has shown.

Increase in crude oil price as well as domestic oil production raised the nation’s revenues from oil, which made the three tiers of government to share N2 trillion in the second quarter of this year, the Director, Communications and Advocacy, NEITI, Dr Ogbonnaya Orji, said in a statement on Monday.

According to the agency’s quarterly review, federal, state and local governments shared N3.95 trillion from the Federation Account in the first six months of the year.

Featuring data sourced from the National Bureau of Statistics, the statement also showed that within the first half of the year, Osun State received N10.24 billion from the Federation Account, while its account was debited with N14.52 billion.

This means that the total deductions from the state’s account was N4.28 billion more than it received from the Federation Account. States accounts are debited due to local and foreign debts they have contracted.

In contrast, Delta State received the highest amount of N101.19 billion in the first half of the year. Total deductions for the state amounted to N13.81 billion or 13.65 per cent of the money received from the Federation Account within the period.

“In fact, quarter two 2018 was the first time an amount of N2 trillion was disbursed since the quarter three of 2014. This is a run of 14 consecutive quarters of disbursements below N2 trillion,” the report stated.

NEITI hinged the increase in revenue earned and shared by the three tiers of government on the rebound in oil prices in the international crude oil market as well as increase in domestic crude oil production.

The Quarterly Review was quoted as stating, “Average oil price in 2016 was $43.5 per barrel, while in 2017 oil price averaged $54.2 per barrel. However, in the first six months of 2018, average oil price was $70.6 per barrel. Thus, on the average, oil price increased by 62.2 per cent between 2016 and the first half of 2018.

“Total oil production in 2016 was 661.1 million barrels, while the figure was 690 million barrels in 2017. In 2016, average monthly oil production was 55.1 million barrels, while it was 57.5 million barrels in 2017. For the first two months of 2018 for which data is available, average production was 59 million barrels.”

The disbursements made by FAAC represented an increase of 41 per cent when compared to the N2.79tn disbursed in the first half of 2017 and 95 per cent increase on the N2tn disbursed in the first half of 2016.

A breakdown of the disbursements showed that the Federal Government received N1.65 trillion; states received N1.38 trillion; while the local governments got N795 billion.

The disparity in the revenues received by each of the three tiers of government was based on the revenue sharing formula of the federation as stipulated in the Constitution, the statement added.

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