The three tiers of government shared a total of N4.55tn between January and September this year as disbursements from the Federation Accounts Allocation Committee.
According to the latest quarterly report of the Nigerian Extractive Industries Transparency Initiative, released in Abuja on Wednesday, out of the N4.55tn that was shared in the review period, N1.76tn was disbursed in the third quarter as against the N1.38tn and N1.41tn shared in the second and first quarters of the year, respectively.
The sum of N271.78bn went to the Department of Petroleum Resources, Nigeria Customs Service and the Federal Inland Revenue Service as costs of revenue collection.
For instance, while the Federal Government got N549.41bn in the second quarter of 2017, the third quarter figure was N752.79bn, an increase of 37.02 per cent. The trend was the same for the states and local governments, as they received N586.58bn and N363.98bn in the third quarter as against N467.13bn and N280.42bn in the second quarter, respectively.
The report noted that the percentage increases between the two quarters for the two tiers of government were 25.57 per cent and 29.8 per cent.
It attributed the reason for the increases in FAAC disbursements to the three tiers of government in the third quarter to the positive developments in the oil sector occasioned by resurgent crude prices and increased production levels.
The NEITI quarterly review report based its analysis on data obtained from FAAC, the National Bureau of Statistics, Federal Ministry of Finance and the Budget Office of the Federation.
The report stated that the “upward trend in the FAAC disbursements to the three tiers of government are encouraging signs, which if sustained, will improve government expenditures, help to boost economic activities and move the country further away from recession.”
The report also stated that Nigeria’s revenue in the first half of 2017 was about 49 per cent lower than the budgeted figures.
It stated that while the government projected N5.368tn revenue inflow in its 2017 fiscal framework for the first six months of the year, the actual inflow was N2.712tn.
The government’s half-year projections were N2.67tn for oil and N2.7tn for non-oil revenues, but the actual revenue fell short of projections.
“Actual oil revenue was N1.587tn, representing a shortfall of N1.079tn, implying a 40.4 per cent underperformance. Non-oil revenue fared slightly worse, as only 41.6 per cent of the projected revenue was realised. Actual non-oil revenue totalled N1.125tn, indicating a shortfall of N1.575tn,” the report stated.
It pointed out that while the government projected that the non-oil sector would outperform the oil sector, the latter performed better by as much as 41 per cent in revenue generation, raking in N1.587tn as against N1.125tn for the non-oil sector.
Figures for the three tiers of government were no different. The Federal Government had hoped for N2.542tn revenue flow for the first half of the year, but the actual revenue was N1.497tn.
A breakdown of the inflows showed that the oil sector accounted for a larger part of the shortfall, with a 60 per cent drop, while the non-oil sector underperformed by 49 per cent.
“Budgeted half-year inflow from the oil sector was N1.061tn but actual oil inflow to the Federal Government was N414bn. The Federal Government’s budget estimated half-year non-oil revenue inflow at N705bn, but realised only N352bn, indicating a 49 per cent shortfall,” the NEITI report stated.