Nigeria’s Minister of Finance Adeosun & CBN Governor
For several years now, Niger Delta states continue to receive the highest revenue allocation from the monthly allocation distributed among all Nigerian states, local and the federal government.
It was not different in the first quarter of this year 2018 when the revenue allocation details were released by the Federal Account Allocation Committee FAAC. The four states of Akwa Ibom, Bayelsa, Delta, and Rivers together carted home a total of N181.94 billion out of the shared revenue of N593.1 billion.
A breakdown of the monthly federation account distribution covering the three months shows Akwa Ibom with N50.880 Billion, Delta 49.430 Billion, Rivers 42.740 Billion, and Bayelsa N38.890 Billion.
The allocation was tailored along the laid down revenue sharing formula which allocates 52.68% to the federal government, 26.72 % to states, and 20.60% to Local government areas.
In arriving at the net allocation figures the total indebtedness of states is highly considered. This means that the total liabilities of each state are deducted from source before allocation. These liabilities include external debts, contractual obligations, and other deductions such as the National Water Rehabilitation Projects, National Agriculture technology Support Payment for Fertilizer.
Other deductions from the monthly state revenue include State Water Supply Project, State Agriculture Project, and National Fadama Project.
A sharp contrast with the bogus allocation of the Niger Delta states is paltry allocations of some states like Cross River who got only N8.4Billion, Osun state N4.98 Billion and Ekiti state N8.75 Billion.
The allocation given to the four Niger Delta states is said to be ten times the allocation gotten by other states with even bigger landmass and higher population observed a financial development expert. Therefore there is no reason why the Niger Delta states cannot witness the significant development of infrastructure and improved standard of living.
The allocation is made from the Nigerian federation account which harbours funds from the Nigerian National Petroleum Corporation NNPC, The Nigerian Customs Service NCS and the Federal Inland Revenue service FIRS.
The Federation Account Allocation Committee comprises of all commissioners of finance of the 36 six states of Nigeria with the Minister of Finance presiding as the chairman of the committee and the Accountant General as the vice-chairman.
Also attending as members are the representatives of the NNPC, FIRS and the Customs, Revenue Mobilisation, and Allocation and Fiscal Commission RMAFC as well as the Central Bank of Nigeria CBN.
Three key components constitute the legal framework for the sharing of the revenue. These are the derivation principle where funds are allocated to the oil-producing states of the Niger Delta, the statutory allocation, and the value-added tax allocation.