Delta, Akwa-Ibom, and Rivers Lead in Federal Allocations to Nigerian States

A recent report from the Nigeria Extractive Industries Transparency Initiative (NEITI) sheds light on the allocation of federal funds to Nigerian states, with Delta, Akwa-Ibom, and Rivers emerging as the top beneficiaries in the first half of the year.

According to NEITI, Nigerian states collectively 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. However, there was a 12% reduction in overall allocation during the second quarter, leading to a 15.8% decrease in the states’ share, from N817.8 billion in the first quarter to N688.2 billion in the second.

Despite this decline, NEITI noted that when the 13% derivation revenue was added, the states’ allocations actually exceeded the federal government’s share. In addition, 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 same period in 2022, state government allocations in 2023 saw a growth of about 11.2%, reaching N1.42 trillion, up from N1.26 trillion.

On a state-by-state basis, Delta State received the largest allocation in the second quarter of 2023, totaling 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.

The report also highlighted deductions for debt repayment, revealing that Lagos State had the highest deductions from its allocation 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). 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 in Ogun, Osun, and Cross River States, where deductions exceeded 30%, while Rivers, Jigawa, and Kebbi states demonstrated strong sustainability capacity.

The allocation and deductions data reflect the dynamic fiscal landscape of Nigerian states and highlight the challenges and opportunities they face in managing their finances.