…allocation rose by 102%
The 13 per cent derivation revenue payments to Nigeria’s oil-producing states from the Federation Account jumped by 102.26 per cent (N679.26 billion) to N1.34 trillion last year compared with N664.22 billion in the preceding year, findings by New Telegraph has shown.
The proceeds, which come as extra allocation to the states, contrast the obvious infrastructure decay like roads, schools, hospitals and other public facilities in most of the states.
An analysis of Federation Account Allocation Committee (FAAC) communiqués and data released by the National Bureau of Statistics (NBS), last year, indicated that the oil-producing states received N57.92 billion in January; N85.10 billion in February; N166.24 billion in March; N90.12 billion in April; N106.50 billion in May; N95.60 billion in June; N109.82 billion in July 2024; N99.47 billion in August; N90.42 billion in September; N132.40 billion in October; N193.29 billion in November and N113.48 billion in December as 13 per cent derivation revenue payments from FAAC.
The country’s oil producing states such as, Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Imo, Edo, Ondo, and Rivers, are statutorily required to be paid 13 per cent of oil revenue from the Federation Account as Derivation Fund, which they are expected to use for the exclusive benefit of their oil/ gas producing communities whose environments are typically negatively impacted by mineral exploration and production activities.
For instance, the Federal Ministry of Finance, while speaking on the outcome of the FAAC meeting for January 2025 recently, said that the committee shared a total sum of N1.424 trillion among the three tiers of government as Federation Allocation for the month of December 2024 from a gross total of N2.310 trillion.
The ministry further said: “From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Exchange Difference (ED), the Federal Government received N451.193 billion, the states received N498.498 billion, the Local Government Councils got N361.754 billion, while the Oil Producing States received N113.477 billion as Derivation, (13% of Mineral Revenue). “The sum of N84.780 billion was given for the cost of collection, while N801.175 billion was allocated for Transfers Intervention and Refunds.”
New Telegraph reports that compared with 2022 and 2023, the country’s 36 states generally benefitted from higher FAAC allocations last year, especially from exchange rate gains in the oil sector, as a result of reforms introduced by the President Bola Tinubu-led administration following its assumption of power on May 29, 2023.
Indeed, in its latest “Nigeria Development Update” publication released last year, the World Bank said that the country’s oil sector growth accelerated from a contraction of 8.7 percent in H1 2023 to a growth of 7.8 percent in H1 2024, adding that: “The sector benefited from a moderate increase in crude oil and condensates production which grew by 2.9 percent in H1 2024 to 1.5 mbpd.”
