36 states get N1.51trn allocation in six months, says NEITI

34.5 per cent of the total N4.37 trillion crude oil revenue amounting to N1.51 trillion was shared among the 36 states of the federation between January and June 2023, the second quarter 2023 Federation Account Statutory Revenue Allocations Report has revealed.

The report by the Nigerian Extractive Industries Transparency Initiative (NEITI) showed the states received about N817.79 billion from the N2.32 trillion total distributable allocation in the first quarter and N688.2billion of the N2.04trillion allocation in the second quarter.

According to the report, what states received in the 2023 first quarter dropped from N817.8 billion to N688.2 billion, indicating a 12 per cent decline in the overall allocation and 15.8% reduction in state shares.

Despite the decline in the overall allocation, the report noted that the share of states’ allocations exceeded the federal government’s when the 13 per cent derivation revenue was added.

Apart from the share of the statutory allocations, the report said the nine oil-producing states, namely Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers received additional allocations as their share of the 13 per cent derivation revenue to bring their total receipts to about N869.09 billion.

On a year-on-year basis, the report showed that when compared with the corresponding period in 2022, allocations to the State governments from the Federation Account in 2023 grew by about 11.2% to N1.42 trillion from N1.26 trillion.

On a state-by-state basis, the report showed that Delta State received the largest allocation of N102.79 billion among the 36 states in the second quarter, followed by Akwa Ibom and Rivers states, which received N70.01 billion and N69.73 billion respectively. Ekiti, Ebonyi and Nassarawa States received the lowest allocations of N16.95 billion, N16.84 billion and N16.71 billion respectively.

In terms of debt repayment, the report showed that the deduction from Lagos state topped the 36 states’ allocations to service pending debts as a result of foreign loans and contractual obligations such as irrevocable standing payment orders (ISPO) and other liabilities standing against each state.

The report showed that a total deduction of N9 billion from the Lagos State allocation in the second quarter of 2023 was the highest, followed by Delta (N6.76 billion), Ogun (N6.10billion), Kaduna (N5.63billion) and Osun (N5.6billion).

Enugu, Kebbi, Nasarawa, Anambra and Jigawa states recorded the lowest deductions of N1.88billion, N1.51billion, N1.45 billion, N1.29 billion and N1.16 billion respectively.

After all the deductions, the report showed that Delta State’s net allocation of N96.03 billion remained the highest, followed by Rivers (N66.81 billion), Akwa Ibom (N64.81 billion), Lagos (N51.61 billion) and Bayelsa (N51.53 billion).

However, the report identified Plateau, Ogun and Osun as the states whose revenue receipts in the second quarter were negatively impacted the most by the debt deductions.

Plateau State, which occupied the 21st position among the 36 states prior to the debt deduction, dropped to the 31st position, while Ogun moved from the 28th position to the 35th and Osun from 32nd position to 36th position.

In terms of the ratio of each state’s deduction from the allocation for debt repayment, the report expressed concern over the situation affecting Ogun, Osun and Cross River States, although it said Rivers, Jigawa and Kebbi states showed strong sustainability capacity.

While the debt deductions from most of the states’ allocation left them with significant net take-home, at least two states (Ogun and Osun) debt deductions were above 30 per cent, while the deductions from Cross River and Plateau states’ allocations were 29 per cent and 28 per cent respectively.

Imo, Ekiti, Gombe, Kaduna and Bauchi recorded deductions that accounted for almost a quarter of their gross allocations, the report said.

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