According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the revenue allocated to the Federation Account experienced a substantial 23% decline in the second quarter of 2023 (Q2’23), totaling N2.04 trillion. This marked a decrease from the N2.32 trillion recorded in the first quarter (Q1’23).
NEITI’s review reveals that the three tiers of government – the Federal, State, and Local Government Councils – collectively shared a sum of N4.37 trillion as statutory revenue allocations in the first half of the year.
This allocation ensured that each tier of government received more than N1 trillion during the initial six months of the year. On a year-on-year basis, the report highlights that the distributable revenue for the first half of 2023 (H1’23) stood at N4.366 trillion, reflecting a significant increase of approximately 16.7% compared to the N4.05 trillion distributed during the same period in 2022 (H1’22).
Breaking down the revenue receipts in H1’23, the Federal Government received approximately N1.78 trillion, constituting 40.7% of the total, while State governments obtained N1.5 trillion, equivalent to 34.5%. The Local Government Councils secured N1.08 trillion, representing 24.8% of the overall distributable revenue for the period.
The report further indicates that the allocation to the Federal Government grew by 19.8%, reaching N1.78 trillion in 2023, up from N1.48 trillion in H1’22. Similarly, State government allocations increased by approximately 11.2% to N1.42 trillion in H1’23, compared to N1.26 trillion in H1’22. Local Government Council allocations also rose by 16.8%, amounting to N1.08 trillion in H1’23, as opposed to N926 billion in H1’22.
Dr. Orji Ogbonnanya Orji, the Executive Secretary of NEITI, noted that the increase in half-yearly allocations in 2023 follows a consistent upward trend from the previous year. In the corresponding period, distributable revenue for the first half of the year had risen by 16.7%, climbing from N3.47 trillion in January-June 2021 to N4.05 trillion in the same period in 2022.
Additionally, the report highlights that the Q2’23 FAAC distribution saw an absolute decrease, with total distributable revenue amounting to N2.02 trillion, marking a 13% decrease from the approximately N2.16 trillion distributed in Q2’22.
Speaking at the event Chairman House of Representative committee on Petroleum Resources Down Honorable Ikenga Imo Ugochinyere eep concern over the underperformance of the solid mineral industry, emphasizing the need for urgent action to address the sector’s revenue challenges.
He said
”It is very painful and very shameful that the solid minerals industry could only raise 170 billion Naira Revenue and this is so painful in the sense that you see a lot of money in activities going on in the country I’m saying that it is just 170 billion that the whole solid minerals can inject into the economy. We see neighbouring countries including the one that is even threatening us Niger. Africa is carried by solid mineral we have huge landmark that has a lot of mineral deposit and then you can not even get up to 1% contribution into the Nigerian economy so this report is very timely it will help to open government as to understand and be able to pay more attention in ensuring that not only that we block the leakages, it will make it more transparent more accountable and increased Revenue and more importantly the issue clean energy and I think that the report is coming at the right time and governments must pay attention to it to work with them first as provided in the NEITI act who will do public hearings on it as required by the law and ensure that people who have defaulted in one way or the other are made to accounts and face the full Wrath of the law and also we will be discussing with our colleagues to see how we can strengthen Legislation so that mean NEITI can have power to fight as well as make recommendations for prosecution sanctions and so this will be made possible through the reworking the NEITI Act