Federal, state, local govts received N3.473 trillion in Q2 2024 – NEITI

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the Federal, State, and Local Governments in Nigeria received a total of N3.473 trillion in the second quarter of 2024.

This represents a 1.42 per cent increase, equivalent to N46.77 billion, from the N3.426 trillion disbursed in the first quarter of the year.

NEITI disclosed this on Monday in a statement by the Assistant Director, Communications & Advocacy, Chris Ochonu.

According to NEITI’s Quarterly Report on Federation Account Revenue Allocations for the second quarter, this uptick is attributed to steady revenue inflows into the Federation Account from various sources.

The report was presented by NEITI’s Executive Secretary, Ogbonnaya Orji, in Abuja, where he emphasised the role of such disclosures in bolstering public accountability in managing public finances.

“Our Quarterly Review aims to shed light on the revenue sources for the Federation Account and identify the factors influencing these figures over time.

“The objective is to enhance awareness and foster transparency in the management of public resources,” Mr Orji was quoted as saying.

He called on civil society organisations to step up their efforts in tracking government expenditures and monitoring allocations across all government tiers.

Breakdown

The report showed that of the N3.473 trillion disbursed in the second quarter, the federal government received N1.102 trillion, accounting for 33.35 per cent of the total.

The 36 states collectively received N1.337 trillion, representing 40.47 per cent, while the 774 local government councils were allocated N864.98 billion, or 26.18 per cent.

In addition, N169.26 billion was disbursed to nine oil-producing states as their derivation share from mineral revenues. Notably, Delta, Bayelsa, and Rivers States emerged as the largest beneficiaries under the derivation arrangement.

A comparative analysis of Q1 and Q2 2024 shows a decline of N41.44 billion (3.76 per cent) in the federal government’s allocation, while the states experienced a rise of N58.13 billion (4.29 per cent).

Local government councils also saw a 3.57 per cent increase in their disbursements, up by N30.82 billion.

Revenue sources

The report highlighted the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), and the Nigeria Customs Service (NCS) as the primary contributors to the Federation Account.

Their remittances include oil and gas royalties, petroleum profit tax, company income tax, value-added tax (VAT), and import and excise duties.

NEITI also observed a fluctuating pattern in monthly allocations, with disbursements rising from N1.094 trillion in January 2024 to N1.098 trillion in February, only to dip slightly to N1.065 trillion in March.

State, LG allocations

Delta State topped the list of beneficiaries, receiving N137.357 billion in the second quarter, followed by Lagos with N123.282 billion, and Rivers at N108.104 billion.

At the lower end of the spectrum, Nasarawa, Ebonyi, and Ekiti States received the smallest allocations, with each receiving between N24 billion and N26 billion.

Among local governments, Alimosho in Lagos State was allocated the highest amount, N5.721 billion, followed by Ajeromi/Ifelodun with N4.592 billion. Ifedayo Local Government in Osun State received the least, 82 million.

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Recommendations

In its recommendations, NEITI urged states to explore the ongoing reforms in the solid minerals sector as a potential avenue to diversify revenue sources.

The report also called on the Central Bank of Nigeria (CBN) to strengthen measures to stabilise the exchange rate, with the aim of curbing fluctuations in Federation Account remittances.

Additionally, NEITI advised states to adopt more realistic budget benchmarks for oil production and exports to mitigate the risks associated with volatile global prices.

The Revenue Mobilisation Allocation and Fiscal Commission (RMFAC) and the Office of the Accountant General of the Federation (OAGF) were encouraged to enhance transparency, particularly regarding payments of derivation arrears and debt repayment refunds.