• Revenue Drops By 40.67% To N2.788tr In 2017 Half-Year

The Nigerian Extractive Industries Transparency Initiative (NEITI), on Monday released its half-year quarterly review showing that the three tiers of government distributed N2.788tr between January and June this year, representing a 40.67% shortfall over the amount budgeted for the period.
Although the amount rose 38% above the Federation Accountant Allocation Committee (FAAC) disbursement in the corresponding period of 2016, NEITI noted that the volatile “nature of disbursements to all tiers of government in the first half of 2017 would suggest difficulty in implementing budgets at Federal, State and Local Government levels.”
Continuing, the report titled: “FAAC Disbursement in First Half of 2017: Trends, Issues and Implications,” believes “the volatility in revenue inflows will adversely affect planning and expenditure of government and thus likely hamper efforts at stimulating growth and development.”
Specifically, the amount distributed in the first six months of this year by the three tiers represented N1.821tr or 40.67% drop over what was budgeted and actual receipt during the first half of this year.
Of the N2.877tr distributed, the Federal Government received N1.09tr or 39.09%; followed by the N923bn or 33.1% shared by the 36 state governments and Abuja; while the nation’s 774 local government councils received N549.8bn or 19.72% of total. The report did not however say what happened to the remaining 8.09% between the total amount disbursed.
The Federal Government received N1.237tr in 2015; before dropping to N854.45bn; before rising to N1.098tr.
A breakdown of the monthly amount disbursed to the Federal Government from 2015, 2016 to 2017 showed that January 2015 was the peak, with N249.35bn; followed by March of the same year when it received N247.95bn; followed by N216.2bn in February 2015.
“Despite the 38% increase in disbursements in the first half of 2017 when compared with 2016, all the three tiers of government suffered significant revenue decline in terms of projected FAAC disbursement.
“Coupled with the low price of oil is the country’s difficulty in meeting the targeted/budgeted production rate of 2.2 million barrels per day. Production has consistently fallen below two million barrels per day since March 2016,” the report noted.
This, it continued resulted in the double “whammy” of low oil prices and lower production that hit the country since 2014, which has persisted.
Worse still, NEITI noted that the governments spent N513bn or 40.27% of their total FAAC disbursements in the first quarter of 2017 on Debt Servicing, which was far better than the N1.276tr recorded in the corresponding period of 2016.
Total debt service as a ratio of total FAAC Allocations, the report noted, has remained high on a quarterly basis over the past three years, spiking at 40.57% in the first quarter of 2016; followed by 40.27% in the corresponding period of this year, just as it was its lowest point of 16.7% in the fourth quarter of 2017.
Also on Monday, NEITI published the two-tranche disbursements of the refunds of N760.18bn over deductions from FAAC allocations to states and LGs used for quick payment of debt relief granted to Nigeria by the Paris Club of creditors between 1995 and 2002, showing that oil producing states- Rivers, Delta, Akwa Ibom and Bayelsa got the lion’s share. They were followed by Kano, N31.74bn; Lagos, N25.12bn; and Kaduna, N24.61bn.
While Rivers got N44.93bn; followed by Delta with N37.61bn; Akwa Ibom received N35.98bn; and Bayelsa, N34.9bn