The thirty-six states of the federation got the sum of N3.071 trillion between June 2023 and February 2024, Blueprint’s investigation has revealed.
Data collated from the National Bureau of Statistics (NBS) by the newspaper showed the money is a significant increase over the amount distributed by the Federation Account Allocation Committee (FAAC) between 2022 and 2023.
In his inauguration speech, President Bola Ahmed Tinubu announced the removal of fuel subsidy, which he said increasingly, favored the rich more than the poor.
In the past several years, Nigeria’s foreign exchange inflows reduced significantly due to oil theft and pipeline vandalism.
A few days later, the Central Bank of Nigeria (CBN) floated the Naira at the foreign exchange market.
…FAAC boosts allocations
Blueprint reports that FAAC allocation to States received a massive boost under the Tinubu administration, as subsidy/under-recovery was paid into the federation account.
In 2022, the President Muhammadu Buhari administration spent a whopping N4.3 trillion on petrol subsidy, and in the first six months of 2023, it appropriated the sum of N3.6 trillion for the same subsidy.
For instance, in the month of January, 2024, Lagos received the sum of N31.638 billion, Delta got N30.373 billion while Rivers, Akwa Ibom and Bayelsa got the sum N25.225 billion, N20.970 billion and N17.213 billion respectively.
In February, FAAC distributed the sum of N38.110 billion, N28.377 billion, N26.506 billion, N22.832 billion, and N23.624 billion to Delta, Rivers, Akwa Ibom, Bayelsa, and Lagos respectively. Even Osun and Ogun states which used to compete for states with lowest allocation saw a significant leap from N4 billion to over N7 billion.
…The figures as a whole
Available information shows that the three tiers of government in Africa’s biggest economy shared a record-breaking N1.959 trillion in July 2023, a 149 per cent increase from the amount shared in June (N786.161 billion) and a 199 per cent increase from May allocations (N655.93 billion).
Further breakdown of the N1.9 trillion showed statutory collections made up N1.7 trillion of the federally collected revenues, followed by N293 billion from VAT and N12 billion from electronic money transfer charges.
…End of Buhari’s regime
As the curtains were drawn to end the 8-years of the Buhari administration in May, 2023, FAAC shared N786 billion among the three tiers of government.
The allocation was N130.229 billion higher than the amount shared in April, and was the highest revenue the tiers of government had received since the beginning of that year, after receiving N990.189 billion in December 2022.
FAAC shared N750.174 billion to the governments in January, N722.677 billion in February, N714.629 billion in March, and N655.932 billion in April.
The committee said the N786.161 billion was the total distributable revenue, which comprised statutory revenue of N519.545 billion and value-added tax (VAT) revenue of N251.607 billion.
It also included an electronic money transfer levy (EMTL) of N14.370 billion and an Exchange Difference revenue of N639 million.
Of the N786.161 billion distributable revenue, the federal and state governments received N301.889 billion and N265.875 billion respectively, while LGCs got N195.541 billion.
The committee also disclosed that a total sum of N22.855 billion was shared to the relevant states as 13 per cent derivation revenue, adding that the revenue received in May surpassed that of April by N204.324 billion.
Despite the 13 per cent derivation fund for oil producing states the level of poverty, hunger, disease and other vices plaguing the states is appalling.
…2023
Towards the end of 2023, the FAAC said it shared N1.783 trillion from November revenue which accrued to the federation account, among the three tiers of government.
This, it said, was distributable revenue which comprised statutory revenue of N376.306 billion, Value Added Tax (VAT) revenue of N335.656 billion, electronic money transfer levy revenue of N11.952 billion and exchange difference revenue of N364.869 billion.
The figure is an increment from the N1.08 trillion shared in November 2023.
FAAC noted that at the end of the third day of the meeting, the total revenue of N1.6 trillion was available in November 2023. Total deductions for cost of collections were N60.960 billion; total transfers, interventions and refunds were N470.592 billion.
Accordingly, it stated that the Gross Statutory Revenue of N882.560 billion was received for November 2023. This was higher than the N660.090 billion received in October 2023 by N222.470 billion.
The gross revenue available from the VAT in November 2023 was N360.455 billion. This was higher than the N347.343 billion available in October 2023 by N13.112 billion.
From the N1, 088.783 trillion total distributable revenue, the federal government received N402.867 billion, the state governments received N351.697 billion, and the 774 local government areas received N258.810 billion.
N75.410 billion (13 per cent of mineral revenue) was shared among the benefiting states as derivation revenue for the said accrued amount.
From the N376.306 billion distributable statutory revenue, the Federal Government received N174.908 billion, the states received N88.716 billion, and the LGAs received N68.396 billion.
The sum of N44.286 billion (13 per cent of mineral revenue) was shared among the benefiting states as derivation revenue.
The Federal Government received N50.348 billion; the 36 states received N167. 828 billion and LGAs: N117.480 billion from the N335.656 billion distributable VAT revenue.
The N11.952 billion electronic money transfer levy was shared: the Federal Government received N1.793 billion, the State Governments received N5.976 billion, and the Local Government Councils received N4.183 billion.
The Federal Government received N175.817 billion from the N364.869 billion Exchange Difference revenue. The state governments received N89.177 billion, and the LGAs received N68.751 billion. The sum of N31.124 billion (13 per cent of mineral revenue) was shared with the benefiting states as derivation revenue.
…January 2024
In January 2024, the FAAC shared a total of N1.149 trillion federation account revenue among the Federal Government, States and Local Government Councils.
This total distributable revenue comprised statutory revenue of N463.079 billion, distributable Value Added Tax (VAT) revenue of N391.787 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.922 billion and Exchange Difference revenue of N279.028 billion.
…BudgIT
A report by BudgIT, a civic organisation helping to make the Nigerian budget and public data more understandable and accessible, said: “State governments’ recurrent costs have increased significantly over the years with only a small portion of collected revenue and loans dedicated to meet capital.”
“This spending pattern is not sustainable as this has opened gaps in providing quality healthcare services and educational systems, thus slowing down social development as well as growth in other key areas of the economy,” BudgIT said in its report titled ‘Patterns in States’ Expenditure’.
The report also showed at least 50 per cent of the total revenue of 33 states was federal transfers, with 13 states relying on federal transfers for at least 70 per cent of their total revenues during the period under review.
…States IGR
According to BudgIT, Kebbi, Ondo, Kogi, Ekiti, and Gombe states generated at least 30 percent of their Internally Generated Revenue (IGR) at the end of Q1, 2023, while Jigawa, Bayelsa, Plateau, and Anambra states achieved at least 27 percent.
Apart from these 11 states, the report showed every other state generated below 25 per cent of their IGR.
Akwa Ibom, Imo, Enugu, and Katsina states generated below 15 per cent of their projected internal revenue for the year, according to the report.
All over the states in the country it is either kidnapping, banditry, herders-farmers clash or one security challenge after the other.
…What states should do -Analysts
With higher allocations from the FAAC, Nigerians are calling on state governors to do away with extravagant lifestyles and focus on infrastructural development and provide essential services to ease the economic hardship steering citizens in the face.
They urged the governors to reduce their ostentatious spending and focus on reducing the cost of food items and essential services to alleviate the hardships facing people living in any part of their states, especially those in the rural communities.
According to them, states needed to do more for their citizens during this difficult period, especially with increasing FAAC allocation.
Speaking along this line of thought, a public finance expert, Niyi Awoyemi, said “rising FAAC allocation presents a perfect opportunity for states to provide new direction anchored on prudence, revenue base expansion, lean cabinets, and increased accountability of public expenditure.
“Central to the states’ rescue plans is a reduction in the cost of governance. States governors need to resist reckless lifestyles by having state-procured jets. The era of having a thousand aides or cabinet members must stop.”
In a reaction, Executive Director Human Growth for Peace Initiative Bashiru Olasupo said there was a need for leaders, citizens’ engagement for openness and transparency in public spending.
He said: “If there was a robust structure in place, if there was proper communication between the leaders and the people, if there was proper engagement with the people, I think we will not be having this problem.
“What was the input of the masses in allocation of these monies and what are the allocation for? It is possible because there is connection, no discussion, no communication; it is possible for those who want to play with the money to play with the money.”
While beaming his searchlight on Delta state, a management consultant, Dr Prosper Awhoregba, said despite its oil wealth and 13 per cent derivation, the state still lacked the basic infrastructure.
In an interview with Blueprint, Awhoregba said: “Projects that are planned to improve the welfare of the people become drain pipes from where a select few of the political class help themselves to stupendous wealth. An example or two may suffice. After the government spent approximately N25 billion on the Oghara IPP project, the site is now covered in thick forest. Another is the interminable construction of the Ughelli-Asaba road that has taken over 17 years with no end in sight.
“Asaba and Warri, the state’s major cities, remain rustic and bucolic in contrast to other state capitals and major Nigerian cities, particularly Uyo, Port Harcourt, and even Dutse in the far north. After only one heavy rain, roads built or rehabilitated by the former roadmaster were washed away.
“The massive allocations from last year amounted to nothing. This is despite the governor’s courage in awarding some major contracts to Julius Berger, which is a departure from the past, when major contracts were awarded to unknown and inexperienced entities, who are cronies of the former governor.
“Finally, Delta’s massive debt burden of N421.8 billion and $59.9 million in domestic and foreign debts, in addition to poor governance, devalue any allocation made to the State. It is time we got serious in holding our governors accountable.”
Also, a software engineer, John Musa, said the country’s problem is with the sub-nationals, adding that with increased allocation from the federal government, the states should not be complaining.
While not exonerating the federal government from blame, Musa said the larger share of blame should go to the states that have refused to use the allocation they receive from FAAC judiciously.
“Look at the issue of subsidy for instance, the money saved from subsidy, the federal government added it to federal allocation and they give to states.
“The state governors have a free pass because nobody is asking them, especially with the increased allocation, what they are really doing with the money? Governors get allocation and they still trouble the federal government about security, education, health, food. With all the money coming to states, they are supposed to prudently manage it by creating an enabling environment for SMEs to thrive. They don’t do any of these. Only God knows what they do with the monies they get every month from FAAC.
“Look at Benue state when Ortom was governor, there is nothing tangible that you can point to that he did. Till date, you can’t point to a legacy project that Ortom did in all his years in office.
“Look at a State like Bayelsa, with all the allocation they get. Last month, they collected close over N25 billion, what do they do with all that allocation?
“I worry that people are not asking the governors questions, they are all fixated on Abuja and Tinubu. Look at the entire Niger Delta, what are they really doing with all these allocations?
“If state governors can put their acts together the high rate of poverty would drastically reduce. Look at education, look at healthcare. Can you imagine that people would be blaming the federal government for lack of maintenance of state general hospitals, and health centres. Its time people begin to hold their Governors, Senators, Honorable members accountable. Their problem is not Tinubu, the bulk of the problem of Nigerians are the governors. And until they begin to hold their governors accountable, the states will continue to be underdeveloped,” he said.