FAAC allocation increased by 25% in 2017 – NEITI

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Finance minister Kemi Adeosun who oversees FAAC meetings

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Tuesday in Abuja said the Federation Account Allocation Committee (FAAC) disbursements increased by 25 per cent in 2017.

NEITI Director Communications and Advocacy, Dr Orji Orji, said this in a statement.

Orji said FAAC disbursed a total sum of N6.418 trillion in 2017 showing an increase of 25.8 per cent and 6.8 per cent when compared to total disbursements of N5.1 trillion and N6.011 trillion in 2016 and 2015 respectively.

Quoting the latest edition of its Quarterly Review titled: “Analysis of FAAC Disbursements in 2017 and Projections for 2018” Orji said a further breakdown of the amount disbursed in 2017 showed that the Federal Government received N2.564 trillion.

The review showed that the 36 states got N1.859 trillion while the 774 local governments shared N1.502 trillion.

The review, it explained, noted that despite the fact that FAAC disbursements increased in 2017 over the preceding years, they were still 34.1 per cent and 25.3 per cent lower than total disbursements of N9.742 trillion and N8.595 trillion in 2013 and 2014 respectively.

The NEITI review attributed the revenue increase in 2017 to rising crude oil prices, improved oil production, and greater attention towards development of non-oil revenue sectors.

It projected brighter prospects in 2018 as a result of the current oil price which recently hovers around 70 dollars per barrel, in addition to upsurge in oil production.

A state-by- state breakdown of the FAAC allocations in 2017 by the review showed that Akwa Ibom State received the highest share of N143.6 billion, followed by Rivers State with a total allocation of N119.6 billion.

Delta State came third with a total allocation of N111.2 billion in 2017 while Bayelsa State got N105.3 billion to take the fourth position.

However, Osun State received N10.4 billion to take the lowest position of FAAC within the year under review.

”Another striking feature of the latest NEITI review of FAAC allocations is the disclosure that the third quarter of 2017 recorded highest revenues of N1.929 trillion, while second quarter recorded the lowest revenues of N1.377 trillion,” Orji said.

He said revenue disbursements from Value Added Tax (VAT) have been on the increase since 2015.

”The increase is an indication of a positive signal in recognition of the government’s policy towards the development of non-oil sectors through sustained revenue generation from services.

”VAT disbursements in 2017 were N967.7 billion and N811 billion in 2016. This represents an increase of 19.3 per cent in 2017 over the figures for 2016.

”Also, total VAT disbursements in 2015 were N778.7 billion. This represents an increase of N188.9 billion (24.3 per cent) over the 2015 figures,” Ojo added.

The review stated that the 36 states received the highest share of VAT revenues of N464.5 billion in 2017, followed by N325.1 billion shared among the 774 local governments, while the federal government received the lowest share from VAT proceeds with N139.3 billion.

It noted that this is on the account of the fact that states take 50 per cent of VAT, while local government areas and the Federal Government take 35 per cent and 15 per cent respectively.

On Paris Club loan refunds, the review disclosed that the 36 states received N760.18 billion.

”The refunds were released in two batches of N516.38 billion and N243.79 billion respectively.

”A breakdown showed that Rivers State got the highest amount of N44.925 billion while Gombe State received the lowest sum of N13.4 billion,” Orji said.