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Despite COVID-19 crisis, FAAC shares highest Q1 revenue in six years

Despite COVID-19 crisis, FAAC shares highest Q1 revenue in six years
May 11
20:36 2020
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Disbursements from the federation accounts allocation committee to the three tiers of government in the first quarter of 2020 was the highest first-quarter disbursements since 2014.

This is according to the quarterly review released by the Nigeria Extractive Industries Transparency Initiative (NEITI) on Monday.

The three tiers of government received N1.95 trillion in the first quarter of 2020.

A breakdown of the disbursements shows that N791.4 billion went to the federal government, N669 billion was shared by the states and about N395 billion was shared by the 774 local government areas.

The balance went to the North East Development Commission, the excess crude account, Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and the Department of Petroleum Resources.

“Total disbursements were N1.648 trillion in Q1 2015, N1.132 trillion in Q1 2016, N1.411 trillion in Q1 2017, N1.938 trillion in Q1 2018, and N1.929 trillion in Q1 2019,” the publication stated.

“While total disbursements in Q1 2020 were slightly higher than Q1 2019 and Q1 2018, disbursements to the three tiers of government in Q1 2020 were slightly lower than Q1 2019 and Q1 2018.

“This is due to transfers to other accounts in Q1 2020 which were not done in either Q1 2019 or Q1 2018. These include allocations to the North East Development Commission and transfer to the excess crude account.”

According to the agency, the COVID-19 pandemic has made it almost certain that second-quarter disbursements will drop following a trend that has occurred since 2015 with the exception of 2018.

“In light of the ‘double whammy’ of declining oil demand and oil prices as a result of the COVID-19 pandemic, government revenue would likely continue to fall in subsequent months.

“As global crude oil prices plummet in the midst of the global oil supply glut arising from lockdown of economic activities in many countries of the world, all tiers of government will struggle to fund their 2020 budgets.”

On the disbursements to states, 31 states received less than N20 billion as total net FAAC disbursements in the first quarter of this year while five states received more than N20 billion.

The states are Lagos (N26.23 billion), Bayelsa (N35.14 billion), Rivers (N39.99 billion), Akwa Ibom (N40.61 billion), and Delta (N52.03 billion).

States were advised to follow the federal government’s lead by making adjustments to their revenue and expenditure plans for the year.

Featured image: Waziri Adio, NEITI executive secretary

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