Banking & Finance Economy

FG, States, LGs shared N8.15trn in 2019 – NEITI

FG, States, LGs shared N8.15trn in 2019 – NEITI
Written by Maritime First

…As AfDB puts Nigeria’s debt at $8.3bn***

The Nigeria Extractive Industries Transparency Initiative (NEITI), said in Abuja on Thursday that the Federal, States, Local Governments and other statutory recipients by the Federation Accounts and Allocation Committee (FAAC), shared N8.15 trillion in 2019.

NEITI disclosed this on its quarterly report, just as the African Development Bank (AfDB) clarified the debts incurred by Africa, particularly Nigeria with a profile debt burden of $8.3bn.

NEITI said that the figure is N377 billion or 4.42 per cent lower than the 2018 figure of N8.524 trillion, but N1.728 trillion or 26.92 per cent higher than the total disbursements of N6.419 trillion made in 2017.

Out of this amount, it said the Federal Government received N3.37 trillion, representing 41.4 per cent of total disbursements; the 36 states got N2.761 trillion (33.9%) while the 774 local governments shared N1.649 trillion (20.2%) of the total disbursements.

The publication which examined FAAC Disbursements to the Federal, States and Local governments in 2019, compared the disbursements of the previous years and made projections for the year 2020.

It noted that in line with the revenue sharing formula, the FG received the highest disbursements from FAAC while local governments got the lowest.

It further disclosed that revenue shared to the three tiers of government in the two previous years 2018 and 2017 followed the same pattern.

“For 2018, total disbursements to FG, states, and local governments were N3.483 trillion, N2.850 trillion, and N1.667 trillion, respectively.

“For 2017, disbursements were N2.563 trillion to FG, N1.859 trillion to states, and N1.502 trillion to local governments,” it said.

A comparative analysis of the disbursements made by FAAC to the federation in 2019 as against the sharing in the two previous years of 2017 and 2018 shows that the total disbursements to the Federal Government in 2019 were 3.08 per cent.

This, it said was lower than the disbursements in 2018, but 31.69 per cent higher than those in 2017.

Also, while the disbursements to the states in 2019 were 3.12 per cent lower than those in 2018, they were 48.54 per cent higher than those in 2017.

It noted that the scenario was the same for the local governments in 2019, as their disbursements were 1.08 per cent lower than those in 2018, but 9.75 per cent %l higher than what was recorded in 2017.

The NEITI Quarterly Review compared total FAAC disbursements between 2013 and 2019 and revealed that the total disbursements fell in three consecutive years from 2013 to 2016 and increased until 2018.

However, the report revealed that increase in total disbursements stopped in 2019, as there was a decrease in 2019 over 2018 figures.

The Report further disclosed that over the seven-year period (2013 – 2019), 2013 recorded the highest disbursements of N9.742 trillion, followed by 2014 (N8.595trillion).

”2018 came third with N8.524 trillion while 2019 had the fourth highest disbursements of N8.147 trillion.

“During the same period (2013-2019), 2019 witnessed the lowest percentage decline in disbursements (-4.42%) while 2018 had the highest percentage increase of 32.8 per cent,” it added.

The report identified a general rising trend in FAAC disbursements from the beginning of the year till about August 2019 when disbursements either fell slightly or remained relatively stable.

It added that central feature of these figures was that disbursements were higher in the second half of 2019 than the first half,” it said.

It also disaggregated disbursements to the various tiers of government.

The figures presented in the review show a wide disparity between net disbursements received by states.

According to the report, Osun and Cross River states have the lowest allocation of N24.14billion and N36.22Billion.

It noted that Delta State received the highest disbursement of N218.58 billion.

“Put differently, if we assume that the net disbursements received by both states were fairly constant, then, the amount received by Delta State in 2019 alone can be used to cover disbursements to Osun State in nine years”, the Report further explained.

It further stated that three states received less than N40 billion, nine states received between 40 billion and 49billion while fourteen states received between 50billion and 59billion respectively.

”Four states: Borno, Katsina, Edo and Kaduna got between 60 and 69billion and Kano State with N82.34 billion.
”Four states of the Niger Delta Region plus Lagos were among the big league of states that received over N100 billion from FAAC allocations.

“This is “Owed largely to the effects of 13 per cent derivation, ” it said.

The NEITI publication also highlighted other important aspects of the FAAC disbursements during the period under review.

These include significant increases in net disbursements to states between 2017 and 2018, in which Ebonyi State recorded the lowest percentage increase in net disbursements in 2017 while the highest percentage increase occurred in Osun State with 118.8 per cent increase in 2018.

For most states (28 of them), it said that the percentage increase of the 2018 disbursements over the 2017 allocations were between 30 and 49 per cent.

On the deductions from states’ allocations, the NEITI Quarterly revealed that Yobe State had the lowest deductions of N2.16 billion while Lagos State had the highest deductions of N44.45 billion.

According to that Report, it is striking that the two states with the lowest net disbursements (Osun and Cross River) has the highest deductions (N27.19 billion and N18.55 billion respectively) after Lagos State.

“However, deductions for most states (22 of them) were below N10 billion,” It added.

Meanwhile, the African Development Bank (AfDB) has clarified the debts incured by Africa, particularly the debt profile of Nigeria and South Africa.

AfDB made this known in a statement by its Communication and External Relations Department on Thursday.

It explained that the World Bank, with a more substantial balance sheet, had significantly larger operations in Africa than the AfDB.

According to the bank, the World Bank’s operations approved for Africa in the 2018 fiscal year amounted to 20.2 billion dollars compared to 10.1 billion dollars by AfDB.

“With regard to Nigeria and South Africa, the World Bank’s outstanding loans for the 2018 fiscal year to both countries stood at 8.3 billion dollars and 2.4 billion dollars, respectively.

“In contrast, the outstanding amounts for the AfDB Group to Nigeria and South Africa were 2.1 billion dollars and 2.0 billion dollars, respectively, for the same fiscal year,” it said.

The bank was reacting to a report credited to the World Bank’s President, David Malpass, who said Multilateral Development Banks, including the AfDB, had a tendency to lend too quickly and in the process, add to the continent’s debt problems.

The AfDB faulted the claim and described it as misleading, inaccurate and not fact based.

The bank noted that such report undermines its integrity and governance systems, and by incorrectly insinuated that it operated under different standards from the World Bank.

It stated that such notion went against the spirit of multilateralism and collaborative work between the banks.

“For the record, the AfDB maintains a very high global standard of transparency. In the 2018 Publish What You Fund report, our institution was ranked the 4th most transparent institution, globally.

Also read:  NEITI: Nigeria earn $21bn from oil, gas sector in 2017

“The Bank provides a strong governance programme for our regional member countries that focuses on public financial management, better and transparent natural resources management, sustainable and transparent debt management and domestic resource mobilisation.

“We have spearheaded the issuance of local currency financing to several countries to mitigate the impacts of foreign exchange risks, while supporting countries to improve tax collection and tax administration.

“As well as leveraging pension funds and sovereign wealth funds to direct more monies into financing development programmes, especially infrastructure.

“The AfDB Legal Support Facility (ALSF) supports countries to negotiate terms of their royalties and taxes to international companies, and terms of their non-concessional loans to some bilateral financiers. We have been highly successful in doing so,” it explained.

The bank said its 2020 African Economic Outlook, at the end of June 2019, put total public debt in Nigeria amounted to 83.9 billion billion, 14.6 per cent higher than the year before.

It stated that the debt represented 20.1 per cent of GDP, up from 17.5 per cent in 2018.

It added that of the total public debt, domestic public debt amounted to 56.7 billion dollars while external public debt was 27.2 billion dollars which represented 32.4 per cent of total public debt.

The bank disclosed that South Africa’s national government debt was estimated at 55.6 per cent of GDP in 2019, up from 52.7 per cent in 2018.

The AfDB noted that South Africa raised most of its funding domestically, with external public debt accounting for only 6.3 per cent of the country’s GDP.

The Bank reiterated its commitment to continue to play critical roles in development efforts and in the aspirations of developing countries, most especially in Africa.

 

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