FG, States, LGs Received N1.95trn From FAAC In First Quarter
Nigeria Extractive Industries Transparency Initiative (NEITI), Tuesday, stated that the Federal, states and local governments received N1.95 trillion from the Federation Account Allocation Committee (FAAC) in the first quarter of 2020.
In a statement in Abuja, NEITI, in its Quarterly Review, disclosed that the Federal Government received N791.4 billion; the states shared N669 billion, while about N395 billion was shared by the 774 local government areas.
It added that the balance went to the North East Development Commission, the Excess Crude Account, Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and the Department of Petroleum Resources (DPR).
NEITI, however, warned that the COVID-19 pandemic would seriously impact the government’s revenue, adding that all tiers of government would face difficulties in funding their budgets.
It said, “on prospects of FAAC disbursements for the rest of the year as a result of the impact of COVID-19, the review remarked that in light of the ‘double whammy’ of declining oil demand and oil prices as a result of the COVID-19 pandemic, government revenue would likely continue to fall in subsequent months.
“As global crude oil prices plummet in the midst of the global oil supply glut arising from lockdown of economic activities in many countries of the world, all tiers of government will struggle to fund their 2020 budgets.”
NEITI further noted that the first quarter 2020 FAAC disbursements were the highest first-quarter disbursements since 2014. It said, “Total disbursements were N1.648 trillion in first quarter 2015, N1.132 trillion in first quarter 2016, N1.411 trillion in first quarter 2017, N1.938 trillion in first quarter 2018, and N1.929 trillion in first quarter 2019.
“The review examined FAAC disbursements in the first quarter of this year and made projections on the possible impacts of COVID-19 on government revenues.
“While total disbursements in first quarter 2020 were slightly higher than first quarter 2019 and first quarter 2018, disbursements to the three tiers of government in first quarter 2020 were slightly lower than first quarter 2019 and first quarter 2018.
“This is due to transfers to other accounts in first quarter 2020 which were not done in either first quarter of 2019 or first quarter 2018. These include allocations to the North East Development Commission and transfer to Excess Crude Account.
“The NEITI Quarterly Review explained that total FAAC allocations during the period under review comprised of gross disbursements to the Federal Government, States, Local Government Councils and the 13 per cent Derivation.
It also covered the cost of collections by the Nigerian Customs Service, the Federal Inland Revenue Service, the Department of Petroleum Resources and other allied handling charges. “NEITI noted that from the previous years, with the exception of 2018, the general trend since 2015 had been that total disbursement fell in the second quarter, before rising in the third quarter. It also noted that with the COVID-19- pandemic, it is almost certain that total disbursements will fall in the second quarter of 2020.”
