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HomeTop NewsNEITI's Latest Fiscal Analysis: Debt deductions hit Plateau, Ogun, and Osun hardest

NEITI’s Latest Fiscal Analysis: Debt deductions hit Plateau, Ogun, and Osun hardest

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In a recent report issued by the Nigeria Extractive Industries Transparency Initiative (NEITI), a comprehensive overview of fiscal allocations among Nigeria’s 36 states for the first half of 2023 has been unveiled.

The report discloses the disbursement of N1.51 trillion over the six-month period, originating from the Federal Accounts Allocation Committee (FAAC) to the three tiers of government including the Federal Capital Territory.

This substantial allocation accounts for 34.5 percent of the total N4.37 trillion distributed among the three tiers of government on a monthly basis. Within this complex fiscal landscape, some noteworthy trends and patterns have emerged.

Delta State secured the highest allocation during this period, with a sizeable N102.79 billion, closely trailed by Akwa Ibom and Rivers States, each receiving N70.01 billion and N69.73 billion, respectively.

On the contrary, Ekiti, Ebonyi, and Nasarawa States found themselves at the lower end of the allocation spectrum, each obtaining N16.95 billion, N16.84 billion, and N16.71 billion, respectively.

The nine oil-producing states, namely Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers, received additional allocations as part of their 13 percent derivation revenue, resulting in a combined total of approximately N869.09 billion.

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However, the NEITI report casts a spotlight on the issue of debt repayment, revealing that the deduction from Lagos State’s allocation was the most significant across all states, amounting to a substantial N9 billion.

Delta, Ogun, Kaduna, and Osun followed with deductions of N6.76 billion, N6.10 billion, N5.63 billion, and N5.6 billion, respectively. In contrast, states like Enugu, Kebbi, Nasarawa, Anambra, and Jigawa experienced comparatively lower deductions, ranging from N1.16 billion to N1.88 billion.

Following these deductions, Delta State’s net allocation remained the highest at N96.03 billion, followed by Rivers (N66.81 billion), Akwa Ibom (N64.81 billion), Lagos (N51.61 billion), and Bayelsa (N51.53 billion).

Remarkably, Plateau, Ogun, and Osun emerged as the states most adversely affected by the debt deductions, as their revenue receipts in the second quarter suffered the most significant negative impacts.

NEITI’s report further stated that while most states managed to retain a substantial net take-home amount following the debt deductions, Ogun and Osun recorded deductions exceeding 30 percent. Cross River and Plateau states also experienced deductions of 29 percent and 28 percent, respectively. Additionally, states such as Imo, Ekiti, Gombe, Kaduna, and Bauchi had deductions that accounted for nearly a quarter of their gross allocations.

Overall, the states collectively received approximately N817.79 billion from the N2.32 trillion total distributable allocation in the first quarter and N688.2 billion from the N2.04 trillion allocation in the second quarter.

This shift signifies a 12 percent decline in the overall allocation during the second quarter, leading to a 15.8 percent reduction in the states’ share compared to the first quarter when N817.8 billion was disbursed.

Interestingly, the report highlights that when the 13 percent derivation revenue is factored in, the states’ allocations surpass those of the federal government, underscoring the unique fiscal dynamics at play in Nigeria’s resource-rich regions.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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