States Get N3.3tn FAAC Allocations

Statutory allocations from the Federal Account Allocation Committee to the 36 states and 774 local government areas from July to December 2023, increased to N3.34tn post-fuel subsidy era.

Figures obtained from the National Bureau of Statistics indicate an increase of N545bn or 19.5 per cent from the N2.79trn distributed to states and local government areas in the first half of the year (January-June).

Amid the worsening hardship, Nigerians, including the organised Labour leaders, in separate interviews with press on Monday, urged state governors to justify the increased allocations by ending the hardship among the masses.

President Bola Tinubu in his inaugural speech on May 29, 2023, terminated the fuel subsidy regime which he said was draining federal allocations.

He promised to invest the savings in social programmes and infrastructure.

However the policy threw the citizens into hardship leading to a hike in the prices of products and services by over 100 per cent.

The bulk of the revenue shared at FAAC meetings by the federal, state, and local governments are earnings from oil exports, taxes, and other statutory allocations.

Under the current revenue-sharing formula, the Federal Government gets 52.68 per cent of the revenue, states 26.72 per cent and local governments 20.60 per cent.

The fund is to ensure development at different levels of government and also to enable the states and LGs to meet their obligations.

But the LGs are not autonomous and how they spend their allocations is determined by the governors.

A monthly breakdown reveals that the sub-national and LGs got the highest allocation of N627.73bn in September, followed by N610.5bn in December, N555.75bn in August, N533bn in November, N514bn in July and N497.97bn in October.

In the first six months of 2023, states and local government areas got N520.87bn in January, N432.21bn in February, N410.4bn in March, N403.39.It further increased to N504.38bn in the month of May and N521.71 in June, making a total of N2.79tn.

The report shows that compared with the corresponding period in 2022, allocations to the state government and LGs grew by an increase of N740bn or 22 per cent from N2.6trn on a year-on-year basis.

Data from the NBS showed that in 2022, states received an allocation of N3.16trn, up from N2.42trn in 2021 and N2.23trn in 2020.

The Federal Government had stated in its revised 2024 – 2026 Medium-Term Fiscal Framework that allocation to states and local government areas may increase by 109.74 per cent to N14.04tn in 2024.

Based on the projection, disbursement to states and local governments has been predicted to increase from the N6.69tn projected in 2023 to N14.04tn in 2024.

Revenue available in the Federation Account is expected to increase by 124.43 percent to N26.61tn in 2024 from N11.86tn in 2023.

The projected rise in revenue is supposed to happen because of exchange rate effects, higher oil production projections and subsidy removal.

Last year, the Minister of Finance, Mr Wale Edun, who was represented by the ministry’s Permanent Secretary, Mr Okokon Udo, at a Federal Account Allocation Committee meeting in Delta State, admitted that allocation to states had improved from an average of N650bn monthly before subsidy to over N1tn monthly post-subsidy.

However, Nigerians have lamented that despite the increased allocation, some governors have not done enough to cushion the impact of the fuel subsidy removal on their citizens due to poor road infrastructure, rising kidnappings, and insecurity.

The Nigeria Labour Congress spokesman, Benson Upah, said Nigerians had not experienced a better quality of life despite the marked increase in allocations to states and LGAs.

“This matter speaks for itself. We have not seen a quality of life commensurate with the resources available to the government. If anything, things are getting getting worse. The quality of life is degenerating at an alarming rate. There is clear and present danger ahead except government changes trajectory,’’ he said.

Spokesperson for the Nigerian Union of Pensioners, Bunmi Ogunkolade, noted that the FAAC allocations and the manner of disbursements were constitutionally captured, explaining that the Constitution had also allowed state governments to dominate the control of resources.