How oil price fall impacts revenue allocations to 3-tiers of Govt ~NEITI
The country’s three tiers of governments shared a total N3.879 trillion from the revenue accruing to the federation accounts in the first six months of the year, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.
In its quarterly review, NEITI said total disbursements to the three levels of government in the first quarter of the year stood at N1.945 trillion while a total of N1.934 trillion was distributed among the three tiers in the second quarter of the year.
The amount distributed to Federal, the 36 states and 774 local governments in the second quarter was impacted by the sharp decline in the revenue generated from crude oil exports and other sources in the period.
The Federal Government received N1.53 trillion of the total amount shared in the period, states collectively received N1.29 trillion, while the local governments received N771.34 billion.
The amount received by the 36 states in the first half of 2020, was 2.8 percent lower than the N1.35 trillion disbursed in the first half of 2019.
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For local government areas, the 2020 first half disbursements were 2.64 percent and 3.04 percent lower than the corresponding disbursements for 2019 and 2018 respectively.
“This aligned with the projections made in the previous issue of the NEITI Quarterly Review which projected lower FAAC disbursement in the second quarter,” the report stated.
It attributed the 0.55 percent decrease in Q2 2020 to a couple of factors such as the rebound in oil prices in the second quarter as a result of ease of lockdowns by countries across the world.
Others include the adjustment of the official exchange rate by the Central Bank of Nigeria from N307 per dollar to N360 per dollar in March resulting in higher naira disbursements.