The Nigeria Extractive Industries Transparency Innitiative on Suday said the 2019 budgets already presented by 35 states cannot be adequately funded even by combined Federation Allocation Account Committe (FAAC) disbursements to each states in 2017 and 2018.
This was contained in NEITI’s latest Quarterly Review released on Sunday.
According to NEITI, the total states revenues (FAAC and Internally Generated Revenue – IGR) in 2017 and 2018 cannot fund 2019 budgets of twenty-eight states.
In a summary of the review signed by NEITI spokesman, Dr Orji Ogbonnaya Orji, said, the review showed that budgets for states are largely too optimistic.
“The review showed that total FAAC disbursements to all tiers of government in the frst quarter of 2019 totaled N1.929 trillion.
“This was 0.45% lower than the N1.938 trillion disbursed in the frst quarter of 2018. The primary reason for the lower disbursements was the drop in oil prices which started in October 2018.
“This review also showed that total FAAC disbursements in the frst quarter of 2019 were lower than disbursements in all quarters of 2018. In addition, the review showed that there are wide disparities in net disbursements received by states, with Delta State receiving the highest disbursement of N55.19 billion and Osun State receiving the lowest of N5.11 billion.
“Finally, this review showed that budgets for states are largely too optimistic. There is no state whose net FAAC disbursements in either 2017 or 2018 can adequately fnance their budgets for 2019.
“Net disbursements to states in 2017 as a percentage of the 2019 budgets ranged between 2.25% (Cross River) and 43.1% (Yobe). Also, net disbursements to states in 2018 as a percentage of the 2019 budgets ranged between 3.54% (Cross River) and 57.7% (Yobe).
“Thus, clearly, no state can fnance its 2019 budgets solely based on FAAC disbursements.
“This highlights the critical gap in the ability of FAAC disbursements to fnance state budgets and brings into focus the importance of internally generated revenue (IGR). It also shows the inevitability of borrowing by states.”