A recent report from the Nigeria Extractive Industries Transparency Initiative (NEITI) reveals that Delta, Akwa-Ibom and Rivers states received the most of the N1.51 trillion allocated from the Federal government to states in the first half of the year.
According to NEITI, the states received approximately N817.79 billion from the total distributable allocations of N2.32 trillion in the first quarter and N688.2 billion from the N2.04 trillion allocated in the second quarter.
There was a 12% reduction in overall allocation in the second quarter, which resulted in a 15.8% decrease in the states’ share from N817.8 billion to N688.2 billion in the first quarter.
Despite the decline, NEITI noted that the states’ allocations exceeded the federal government’s share when the 13% derivation revenue was added.
Additionally, the nine oil-producing states received extra allocations as part of their share of the 13% derivation revenue, bringing their total receipts to approximately N869.09 billion.
Comparing the report’s findings with the corresponding period in 2022, allocations to state governments in 2023 grew by about 11.2% to reach N1.42 trillion, up from N1.26 trillion.
Highest and lowest receivers
On a state-by-state basis, the report revealed that in the second quarter of 2023, Delta state received the largest allocation, totalling N102.79 billion, followed by Akwa Ibom and Rivers states, which received N70.01 billion and N69.73 billion, respectively.
Conversely, Ekiti, Ebonyi, and Nasarawa States received the lowest allocations, with N16.95 billion, N16.84 billion, and N16.71 billion, respectively.
Regarding debt repayment, the report highlighted that Lagos State had the highest deductions from its allocation, primarily due to foreign loans and contractual obligations, including Irrevocable Standing Payment Orders (ISPO) and other liabilities.
In the second quarter of 2023, Lagos State saw a total deduction of N9 billion, followed by Delta (N6.76 billion), Ogun (N6.10 billion), Kaduna (N5.63 billion), and Osun (N5.6 billion).
Conversely, Enugu, Kebbi, Nasarawa, Anambra, and Jigawa States recorded the lowest deductions, with N1.88 billion, N1.51 billion, N1.45 billion, N1.29 billion, and N1.16 billion, respectively.
After all deductions, Delta State retained the highest net allocation of N96.03 billion, followed by Rivers (N66.81 billion), Akwa Ibom (N64.81 billion), Lagos (N51.61 billion), and Bayelsa (N51.53 billion).
Impact on rankings
However, the report indicated that Plateau, Ogun, and Osun were the states most affected by debt deductions, causing their revenue receipts in the second quarter to become negative.
Plateau State dropped from the 21st position among the 36 states to the 31st position, while Ogun moved from 28th to 35th, and Osun from 32nd to 36th.
The report expressed concern about the high ratio of debt deductions from allocations in Ogun, Osun, and Cross River States, with deductions above 30%. In contrast, Rivers, Jigawa, and Kebbi states demonstrated strong sustainability capacity.