Uche Usim, Abuja

Amidst the COVID-19 headwinds, the Federation Accounts Allocation Committee (FAAC) disbursed a total of N1.95 trillion to the Federal, States, Local Government Councils  and other statutory agencies in the first quarter of 2020.

This figure was contained in the latest edition of the Quarterly Review by Nigeria Extractive Industries Transparency Initiative (NEITI) released in Abuja  on Monday.

A breakdown of the disbursements shows that N791.4 billion went to the Federal Government, as states governments shared N669 billion while about N395 billion was distributed among 774 local government areas. The balance of the amount went to the North East Development Commission, the Excess Crude Account, Federal Inland Revenue Service (FIRS), Nigeria Custom Service (NCS), Oil Bearing Communities in the Niger Delta and the Department of Petroleum Resources.

The NEITI report also notes that the Q1, 2020 FAAC disbursements were the highest first quarter disbursements since 2014. “Total disbursements were N1.648 trillion in Q1 2015, N1.132 trillion in Q1 2016, N1.411 trillion in Q1 2017, N1.938 trillion in Q1 2018, and N1.929 trillion in Q1 2019,” the publication stated.

The review examined FAAC disbursements in the first quarter of this year and projected on the possible impact of COVID-19 on government revenues.

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“While total disbursements in Q1 2020 were slightly higher than Q1 2019 and Q1 2018, disbursements to the three tiers of government in Q1, 2020 were slightly lower than Q1 2019 and Q1 2018. This was due to transfers to other accounts in Q1, 2020 which were not done in either Q1 2019 or Q1 2018. These include allocations to the North East Development Commission and transfers to Excess Crude Account,” the review stated.

The NEITI Quarterly Review further explained that total FAAC allocations during the period under review comprised of gross disbursements to the Federal Government, States, Local Government Councils and the 13 per cent Derivation. It also covered cost of collections by the Nigerian Customs Service, the Federal Inland Revenue Service, the Department of Petroleum Resources and other allied handling charges.

It noted that from the previous years, and with the exception of 2018, the general trend since 2015 had been that total disbursements fell in the second quarters, before rising in the third quarters. It also noted that with the COVID-19- pandemic, it is almost certain that total disbursements will fall in the second quarter of 2020.

On FAAC disbursements to states between January and March this year, there was a wide disparity between states as Osun State with the lowest allocation received N6.44 billion and Delta State with the highest disbursement received N52.03, amounting to 708 per cent difference.

The review also disclosed that Delta State’s net FAAC disbursements were higher than the combined total net disbursements of N50.67 billion of the six lowest receiving states, comprising Osun, Cross River, Plateau, Ogun, Ekiti and Gombe. Further analysis revealed that combined disbursements to four states (Delta, Akwa Ibom, Rivers and Bayelsa) with the highest net FAAC disbursements were higher than the combined net disbursements for 17 states with the lowest disbursements.

“The combined total net disbursement to these four states was N167.76 billion. This figure is higher than the combined total of N159.99 billion received by the 17 lowest receiving states (Osun, Cross River, Plateau, Ogun, Ekiti, Gombe, Zamfara, Kwara, Nassarawa, Ebonyi, Taraba, Benue, Adamawa, Bauchi, Abia, and Kogi)”, the review stated.