Delta, A’Ibom, Rivers, Bayelsa Get 46% of Total FAAC Allocation to States in Four Months

Emmanuel Addeh in Abuja

Four states in Nigeria, namely: Delta, Akwa Ibom, Rivers and Bayelsa got close to half of all Federation Account Allocation Committee (FAAC) disbursements to the 36 states in the first four months of 2023, a THISDAY analysis of data sourced from the National Bureau of Statistics (NBS), has shown.

The review indicated that while some states got as low as just over N2 billion in the months January to April, Delta State led the pack of huge allocation receivers from the federation account, followed by Akwa Ibom, Rivers and Bayelsa respectively.

THISDAY analysis of the figures showed that out of the N1.017 trillion disbursed to the 36 States during the period, the four states got N467.2 billion, representing 46 per cent of the total disbursements during the period.

In all, Delta received N46.1 billion, N29.3 billion, N35.5 billion and N38 billion respectively during the months under review, totalling N148.7 billion while Akwa Ibom trailed with N48.8 billion, N24.2 billion, N24.7 billion and N24.4 billion, to hit N122.1 billion receipts in the first four months of the year.

Rivers on its part received N110 billion, broken down into N40.3 billion, N22.7 billion, 24 billion and N23 billion, during the period, while Bayelsa got N86.4 billion in the order of N33.2 billion, N17.4 billion, N16.8 billion and N19 billion.

However, in spite of the volume of receipts, recent figures released by the Debt Management Office (DMO) indicated that all the benefiting states were still heavily indebted, both locally and internationally.

For instance, Delta State’s domestic debts were the highest compared to other states in the South-south region of Nigeria, according to the DMO.

It showed at the time, that with N421.8 billion in domestic debts, Delta was the most indebted state in the South-south region, and was fifth in the region in terms of external debts, with $59.9 million. The new governor, Sheriff Oborevwori, in June got approval to borrow an additional N40 billion.

Also Rivers State, the largest economy in the South-south and second in the country after Lagos in terms of Gross Domestic Product (GDP), was the second most indebted state in the South-south at the time of release of the DMO data, with N225.5 billion as domestic debt. It also had an external debt of $87.1 million, placing third in the region.

Rivers state, under the new governor, Siminalayi Fubara, similarly recently borrowed an additional N200 billion loan on behalf of the state.

In addition, Akwa Ibom’s domestic debt of N206.6 billion was third in the region with an external debt of $44.9 million, while Bayelsa state had a domestic debt of N140 billion at the time and $60.4 million external debt.

Despite the heavy allocations, the states have been heavily criticised as some of the many where huge fund receipts and infrastructural development have not been commensurate. In response, political leaders in the region have always argued that it takes more to build infrastructure in the area due to the topography.

The NBS data further revealed that in January, N93.52 billion was shared among the oil-producing states from the 13 per cent derivation fund while in February, the sum of N32.73 billion was shared among states from the fund.

In March 2023, the sum of N43.21 billion was shared among the oil-producing states from the 13 per cent derivation fund while in April; the sum of N35.10 billion was shared among them.

Essentially, the 13 per cent derivation fund comes from the federation revenue to oil-producing communities through the state governments.  It is enshrined in section 162, sub-section 2 of the Nigerian constitution.

Recipients of the fund include Delta, Akwa Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Lagos and Abia. However, the volume of oil produced by the four states under consideration is remarkably low compared to production by Edo, Ondo, Imo, Lagos and Abia.

Aside the statutory allocation to the states, other sources of payment from the federation account, the data showed, include d: Value Added Tax (VAT), share of ecology fund, as well as miscellaneous sources, including levies on electronic transfers paid by Nigerians when they carry out transactions.