The three tiers of government, comprising federal, states and the 774 local government councils, have shared a total of N4.4 trillion between January and August. The amount included allocations from derivation funds to the nation’s eight oil-producing states of Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers.
Documents exclusively obtained from the Accountant General Office (AGF) by New Telegraph showed that the amount represents the compilation of the grand total of the monthly revenue allocation for the last eight months approved for disbursement at the monthly session of the Federation Account Allocation Committee (FAAC). A breakdown of the allocations revealed that within the period, the Federal Government got the highest amount of N1,621.507 trillion, followed by the 36 states, which received a total sum of N822.448 billion.
On their part, the 774 local government councils received a total of N 633.8 billion. The oil-producing states got extra cash of N297.983 billion as 13 per cent derivation fund during the period. The N4.4 trillion grand total shared among the three tiers of government comprised the net statutory allocation, proceeds from Value Added Tax (VAT) and exchange gain differentials for the past eight months.
The monthly revenue available for sharing has been witnessing a steady decline due to persistent crash in crude oil price at the international market. Constant vandalism of crude oil pipelines has also affected oil output, which consequently took a heavy toll on revenue intakes. For instance, in the January 2015 allocation, FAAC approved a grand total of N500.130 billion for sharing by the three tiers of government, including the 13 per cent derivation fund for oil-producing states. The amount was lower than the N580.378 billion shared in December 2014.
The reduction in the January revenue allocation was attributed to substantial drop in crude oil prices from $77.53 milion in November 2014 to $52.34 million in December 2014. The grand total of N4.4 trillion shared so far from January is inclusive of the August allocation, which is N442.606 billion and that was distributed on Tuesday.
The amount was lower by N278.062 billion compared to N511.799 billion shared in July. Permanent Secretary, Ministry of Finance, Mrs. Anastasia Daniel-Nwobia, confirmed the figure at the monthly FAAC meeting held in Abuja.
Of the amount shared, Federal Government got the highest allocation of N168.623 billion, states N85.528 billion while local government councils got N65.938 billion. The oil-producing states got N27.870 billion, being their share of 13 per cent derivation.
The Permanent Secretary put the gross revenue for the month under consideration at N369.140 billion; an amount, she said, was lower than N433.584 billion received the previous month by N64.444 billion.
She attributed the cut in revenue shared to a drop in crude oil export, shutdown and shut-in of production for maintenance at different times and terminals during July as major issues that negatively impacted crude oil revenue.
The oil price rout that has shrunk the nation’s revenue has impaired the ability of many states to meet their financial obligations, including payment of workers’ salaries. A special finance scheme, approved by President Muhammadu Buhari, was recently announced for states that owed workers’ salaries and entitlements due to the continuous fall in revenue allocations from the Federation Account.
More than a quarter of the 36 states of the federation reportedly owe workers’ salaries in arrears of over N110 billion. Some of the states with the worst debt profile include Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue and Bauchi.
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