Nigeria's Federation Account Inflow Topped N28.6 Trillion in Five Years - NEITI

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24 September 2019

Total revenue inflow to Nigeria's Federation Account between 2012 and 2016 was about N28.6 trillion, the Nigeria Extractive Industries Transparency Initiative (NEITI) said in its latest Fiscal Allocation and Statutory Disbursement (FASD) Audit report.

The transparency agency said the remittances came from three major sources: mineral revenue, non-mineral revenue and Value Added Tax (VAT).

Apart from remittances to the Federation Account, the audit also tracked statutory allocations and their applications with a specific focus on nine states, four interventionist agencies, and five special funds.

The latest allocation and disbursement audit, which is the second by NEITI, also examined funds receipts and utilisation of the first cycle covered-year, 2007 - 2011.

The nine states covered by the statutory allocation and disbursement segment of the report included Rivers, Bayelsa, Akwa Ibom, Nasarawa, Delta, Ondo, Imo, Kano and Gombe states.

The federal agencies covered include the Niger Delta Development Commission (NDDC), Petroleum Technology Development Fund (PTDF), Tertiary Education Trust Fund (TETFUND) and Petroleum Products Pricing Regulatory Agency (PPPRA).

Also, the special funds included the Natural Resources Development Fund (NRDF), Petroleum Equalisation Fund (PEF), Excess Crude Account (ECA), Ecological Fund (EF), and Stabilisation Fund (SF).


Details of the remittances to the Federation Account show that mineral sources contributed the highest amount of N18.15 trillion or 64 per cent of the total earnings. This is followed by the non-mineral source (N6.68 trillion), or 23 per cent, while value-added tax (VAT) contributed N3.73 trillion, or 13 per cent.

The report said the mineral revenue followed deductions for joint venture cash calls and subsidy claims by the Nigerian National Petroleum Corporation (NNPC).

A year-by-year analysis of the total remittances showed that about N4.19 trillion was remitted in 2012, N4.73 trillion in 2013, N4.69 trillion in 2014, N2.89 trillion in 2015 and N1.65 trillion in 2016.

Of the N18.16 trillion mineral revenues shared among the three tiers of government, the report showed the federal government received N8.32 trillion for the period under review, while the 36 State governments shared N4.22 trillion.

The 774 local governments got N3.25 trillion, while about N2.36 trillion went to the nine oil-producing states as 13 per cent derivation revenue to the oil, gas and mining producing states.

The report also disclosed that from the share of non-mineral revenues of N6.68 trillion, the federal government received N3.52 trillion, while the 36 states got N1.79 trillion and 774 local governments N1.38 trillion.

From the total VAT revenue of N3.73 trillion, the federal government received N560 billion, 36 states N1.88 trillion and the 774 LGAs N1.31 trillion.

The report said the NNPC remitted about N8.62 trillion of the total mineral revenue, while the Department of Petroleum Resources (DPR) remitted N3.80 trillion, and the Federal Inland Revenue Service (FIRS) N10.46 trillion.

Of the remittances by the NNPC, the highest was in 2012, while its JV cash calls were highest in 2014.

Akwa Ibom Receives Highest Allocation

On revenues allocation and utilisation by the states, the report disclosed that Akwa Ibom received the highest total mineral revenue of N873.59 billion among the nine states covered by the report, followed by Delta (N713.15 billion).

Nasarawa state got the lowest mineral revenue of N145.88 billion, followed by Gombe State with N155.22 billion, while Imo and Ondo states received N190.42 billion and N247.87 billion respectively.

The report also showed that states of the federation depended heavily on the mineral resources for their revenue inflows within the period under review, with 40 to 73 per cent of their revenues from mineral resources.

Among the nine states covered by the exercise, Rivers and Bayelsa states were the most heavily dependent on mineral resources.

"Rivers State had an aggregate mineral revenue percentage of about 73% of its total revenue for the five years reviewed, followed by Bayelsa State (59%), while Imo State was the least overall dependent on mineral revenues with 32%," the report noted.

Capital expenditure

Further analysis of the expenditure patterns among the nine states showed that between 2012 and 2016, Akwa-Ibom State committed the largest amount (N947.79 billion) into capital expenditure, followed by Delta State (N493.77 billion).

Nasarawa State had the least with capital expenditure of N65.11 billion, followed by Ondo State with N138.67 on capital expenditure.

Kano State recorded N316.08 billion as capital expenditure within the period under review, while Bayelsa spent N335.83 billion on capital expenditure.

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Imo and Gombe states spent N191.34 billion and N148.338 billion on capital expenditures respectively within the period under review.


NEITI said it could not establish Rivers State's capital expenditure, because the State refused to cooperate with the audit review process.

Analysis of the states' capital expenditures in relation to their total revenue revealed Akwa Ibom and Kano as states with relatively good records of capital expenditures.

For instance, Akwa Ibom State spent 79 per cent of its revenues on capital in 2012, 62 per cent in 2013, 60 per cent in 2014, 54 percent in 2015 and 48 per cent in 2016, while Kano State spent 34 per cent of its revenues on capital projects in 2012, 51 per cent in 2013, 49 per cent in 2014 and 61 per cent in 2016.

Capital Expenditure Pattern of the Nine states in relation to their Total Revenue (2012 -2016)

Capital Expenditure to Total Revenue

State 2012 2013 2014 2015 2016

Delta 43% 48% 35% 18% 31%

Kano 54% 51% 49% 41% 61%

Imo 39% 39% 48% 32% 42%

Akwa Ibom 79% 62% 60% 54% 48%

Ondo 37% 28% 18% 37% 27%

Bayelsa 27% 38% 28% 37% 34%

Gombe 44% 49% 40% 20% 35%

Nasarawa 20% 21% 27% 24% 26%

The report, however, noted that the major concerns remained the high recurrent expenditure of the states which negatively impacted the available funds for capital expenditure and the provision of the necessary infrastructure for citizens' collective development.

On allocations to federal agencies and how they were spent, highlights of the report showed that of the N819.81 billion received by the NDDC, about N806.78 billion (98 per cent) came from mineral revenue (federal and oil companies), while about N13 billion came from non-mineral revenues.

The NDDC spent about N932.6 billion and $6.1 billion respectively on recurrent expenditure and capital-related projects.

For the PDTF, a total of N124 billion was received, with signature bonus accounting for N119 billion (96 per cent).

The report showed 37 per cent of the expenditure was on assisted projects, 20 per cent on scholarships, while 43 per cent was spent on administrative purposes.

Similarly, TETFUND got a total of N993 billion, with N805 billion from mineral revenue, while N188 billion was received from non-mineral.

However, NEITI report noted there was an insufficient guide for accounting and operations' processes as a result of the absence of a comprehensive accounting and operational manual by TETFUND.

The Natural Resources Development Account (NRDA) established to develop alternative mineral resources received about N486.26 billion over the period.

Out of this amount, the statutory allocation was N374.15 billion from both mineral and non-mineral revenue, but total disbursements for various projects (N543.63 billion) outstripped inflows by 11 per cent.

The report noted that contrary to the purpose of the NRDA, it served as a borrowing fund for the federal government to meet its obligations in areas such as budget deficits, national security, Independent National Electoral Commission, Nigeria Armed Forces, among others.

On the PEF, a total of N499 billion was received within the review period, with about N382 billion realised as Bridging allowance.

The report said most of its expense totaling about N303.4 billion was expended on claims.

Over the period, total transfers to ECA was N4.35 trillion.

The ECA was created to warehouse the excess amount resulting from increases in crude oil prices as an augmentation tool if there is a shortfall in the revenue.

The Ecological Fund established to address serious ecological problems across the country realized about N276.5 billion during the period, with receipts from excess crude oil at N54 billion.

The report also noted that revenues paid into the fund were utilised for purposes other than which the ecological fund was established.

For instance, the report said about N93.8 billion was released to the federal government for funding of budget deficits and advance to states and local governments to meet shortfalls in their revenue.

On Stabilisation Fund, the report said about N238 billion was received as revenue for the period. It noted that the fund served as a pool to grant loans to various non-related expenditures during the period under review.

For the Nigerian Sovereign Investment Authority (NSIA), the report said a total of $1.250 billion was received from the federal government for the purpose of investment within the period under review.

The report said the payment of subsidy by the Petroleum Products Pricing Regulatory Agency (PPPRA) was stopped in 2011. Since then, payment of subsidy is done through Debt Management Office (DMO).

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