Revenue allocation from the federation Account to the three tiers of government summed up to about N4.55 trillion between January and September 2017, the latest edition of the Nigeria Extractive Industries Transparency Initiative, NEITI, Quarterly Review has showed.
The publication issued on Wednesday in Abuja showed that of the total amount, about N1.76 trillion was shared in the third quarter of 2017, as against the N1.377 trillion and N1.41 trillion disbursed in the second and first quarters of the year respectively.
Information and data on FAAC disbursements for the third quarter of 2017 as well as the mid-year budget implementation also showed the federal government received about N1.851.32 trillion for the three quarters of the year.
This was followed by the state governments, which collected about with N1.509 trillion and the 774 local governments about N913.8 billion.
Further analysis of the revenue allocation showed that about N271.78 billion went to the Department of Petroleum Resources, DPR; Nigeria Customs Service, NCS, and the Federal Inland Revenue Service, FIRS, as cost of revenue collections.
The Review attributed the increases in FAAC disbursements to the three tiers of governments in the third quarter to what it called “positive developments in the oil sector – evidenced from resurgent oil prices and increased production levels.
“The third quarter also represents the summer season when global oil demand and consequently oil prices are generally higher than other times of the year and this could possibly explain the higher revenue accruals to the Federation account in these third quarters,” the report said.
The NEITI Quarterly Review is based on analysis on data obtained from FAAC, National Bureau of Statistics, NBS, Federal Ministry of Finance and the Budget Office of the Federation.
NEITI attributed the rising trend in the FAAC disbursements to the three tiers of governments to the positive improvements in all sources of oil revenues, with the exception of rents, in 2017 than 2016 first halves.
The report said government’s half year projections was about N2.67 trillion for oil and N2.70 trillion for non-oil revenue.
However, actual revenue for the first half of the year fell short of projections, with actual oil revenue of about N1.587 trillion, representing a shortfall of N1.079 trillion, about a 40.4 per cent underperformance.
The increased disbursements, the report said, were in line with recent developments in the oil sector, where global oil prices have rebounded and Nigeria’s oil production has risen.
Nigerian National Petroleum Corporation, NNPC, data showed that oil production averaged 1.953 million barrels per day in June 2017, the highest level recorded since March 2016 when about 1.957 million barrels per day was produced.
The increased production was attributed to the return of normalcy in the Niger Delta region, with the suspension of hostilities by the armed Niger Delta Avengers and resumption of oil export at the Forcados Terminal after many months.
Actual oil revenue was N1.587 trillion, representing a shortfall of N1.079 trillion, or 40.4 per cent underperformance.
Non-oil revenue fared slightly worse, as only 41.6 per cent of the projected revenue was realized. Actual non-oil revenue totalled N1.125 trillion, indicating a shortfall of N1.575 trillion.
Equally, revenues from non-oil sector also recorded huge improvements, with Value Added Tax, VAT, making the largest contribution with about 16 per cent increase over 2016 figures.
The report attributes the development to “increase in economic activities, expansion in the tax base and the improvement in performance of revenue collecting agencies.”
However, the report notes that there was no revenue recorded from solid minerals and dividends from investments funded by FAAC despite the abundant solid minerals deposits in the country.
The NEITI Quarterly Review noted that FAAC disbursements to the states in the first three quarters of 2017 were about 42 per cent lower than the states’ budgetary requirements.
“States will have to aggressively raise their internally generated revenue, IGR in order to be able to actualize their budgets. The alternative is increased borrowing. About half of the states (15) have FAAC disbursements as a ratio of budgets lower than 20 per cent,” the report said.