Disbursements from the Federation Accounts to the three tiers of government in the third quarter of 2016 declined by about 13.73 per cent than the figure recorded in the corresponding period in 2015, the latest analysis of payments showed.
The analysis by the extractive industry’s transparency and accountability agency watchdog, the Nigerian Extractive Industries Transparency Initiative (NEITI), revealed that the federal, states and local governments collected a total of about N1.54 trillion for the third quarter of 2016, compared to about N1.785 trillion received previously in the third quarter of 2015.
However, the report said the disbursements in the third quarter of 2016 were significantly higher than N1.102 trillion and N881.65 billion paid out in the first and second quarters of the year respectively.
The declining allocations to the three tiers of government, the report noted, was a result of the dwindling earnings from oil exports as a result of a massive drop in global oil prices in the international market, and increased disruption in oil production activities by militant groups.
While the federal government receipt in the third quarter of 2016 was about N129.9 billion, the 36 state governments got about N72.1 billion less, while the 774 local governments took N48.5 billion.
However, non-oil revenue disbursements to the three tiers of government for the three quarters of 2016 showed a marginal increase over the same period in 2015, the report said.
Total disbursements in respect of value added tax to the three tiers of government between January and September 2016 was about N601.53 billion, about 0.10 per cent higher than about N600.95 billion disbursed for the corresponding period in 2015.
Detailed review of the VAT disbursements showed that the states received the lion’s share of N288.44 billion in 2015, against N288.72 billion in 2016, followed by local governments, N201.90 billion in 2015, against N202.13 billion 2016. The federal government got only N86.53 billion in 2015, against N86.64 billion in 2016.
A comparison between the states’ 2016 budgets and total FAAC disbursements for the three quarters of 2016 showed lower disbursements from the latter than the former throughout 2016.
Considering that most states depended on FAAC allocations to fund their annual budgets, NEITI observed that lower monthly disbursements was likely to significantly impact budget implementation of all the states of the Federation.
“The dwindling revenue from the petroleum sector, which has led to substantially lower disbursements from the Federation Account will limit the ability of states to effectively execute their budgets,” NEITI Executive Secretary, Waziri Adio, said.