A new report by the Nigeria Extractive Industries Transparency Initiative has revealed that disbursements from the Federation Account to the three tiers of government plunged by 31 per cent in the first half of this year relative to the corresponding period of 2015.
According to NEITI, the drop in revenues may negatively impact budget implementation across the three tiers of government this year, increase the size of budget deficits, and deepen the debt burden.
The report, which is entitled: ‘FAAC disbursements in the first half of 2016 and possible implications’, is the maiden issue of the NEITI quarterly review.
It analysed disbursements by the Federation Accounts Allocation Committee in the first halves of 2015 and 2016, and highlighted possible implications for public governance and management in the country.
It stated that revenues shared to the federal, states and local governments were less by over N800bn from N2.89tn in the first half 2015 to N2.01tn in a similar period this year.
NEITI stated in the report, “This 30.9 per cent decline reflected in lower allocations across the board. The total disbursement to the Federal Government fell from N1.23tn in the first half of 2015 to N854bn in the first half of 2016.
“This represents a 30.9 per cent decline. Total disbursements to the states fell by 30.5 per cent from N1.009tn in the first half of 2015 to N701bn in the first half of 2016. For local governments, allocations from FAAC dropped by 26 per cent from N580.63bn to N429.43bn.”
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