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Tag: FAAC

  • FAAC shares N1.2tr to Fed, states, councils

    FAAC shares N1.2tr to Fed, states, councils

    The Federation Accounts Allocation Committee (FAAC) has distributed a total of N1.208 trillion in revenue to the Federal Government, States, and Local Government Councils for the month of May 2024 from April revenue.

    This figure represents an increase from the N1.017 trillion distributed in March 2024.

    The total distributable revenue of N1.208 trillion was made up of: distributable statutory revenue, N284.716 billion; distributable Value Added Tax (VAT) revenue, N466.457 billion; Electronic Money Transfer Levy (EMTL) revenue, N18.024 billion and exchange rate differential revenue, N438.884 billion.

    While the total revenue available in April 2024 was N2.192 trillion, deductions for cost of collection (N80.517 billion) and transfers, interventions, and refunds (N903.479 billion) resulted in the N1.208 trillion distributable amount.

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    Gross statutory revenue increased by N216.282 billion from N1.017 trillion to N1.233 trillion. Value Added Tax (VAT) decreased by N48.778 billion from N549.698 billion to N500.920 billion.

    Distribution among the three tiers of government was: Federal Government, N390.412 billion; State Governments, N403.403 billion and Local Government Councils, N293.816 billion. Additionally, N120.450 billion (13% of mineral revenue) was distributed to beneficiary states as 13 percent derivation revenue.

    On the N284.716 billion distributable statutory revenue, the communiqué stated that the Federal Government received N112.148  billion, the State Governments received N56.883 billion and the Local Government Councils received N43.855 billion. The sum of N71.830 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.

  • FAAC shares N1.2tr to FG, States, LGAs in May 2024

    FAAC shares N1.2tr to FG, States, LGAs in May 2024

    The Federation Accounts Allocation Committee (FAAC) has distributed N1.208 trillion in revenue to the Federal Government, States, and Local Government Councils for May 2024 from April revenue.

    This figure represents an increase from the N1.017 trillion distributed in March 2024.

    The total distributable revenue of N1.208 trillion was made up of: distributable statutory revenue, N284.716 billion; distributable Value Added Tax (VAT) revenue, N466.457 billion; Electronic Money Transfer Levy (EMTL) revenue, N18.024 billion and exchange rate differential revenue, N438.884 billion.

    While the total revenue available in April 2024 was N2.192 trillion, deductions for cost of collection (N80.517 billion) and transfers, interventions, and refunds (N903.479 billion) resulted in the N1.208 trillion distributable amount.

    Gross statutory revenue increased by N216.282 billion from N1.017 trillion to N1.233 trillion. Value Added Tax (VAT) decreased by N48.778 billion from N549.698 billion to N500.920 billion.

    Distribution among the three tiers of government was: Federal Government, N390.412 billion; State Governments, N403.403 billion and Local Government Councils, N293.816 billion. Additionally, N120.450 billion (13% of mineral revenue) was distributed to beneficiary states as 13 percent derivation revenue.

    On the N284.716 billion distributable statutory revenue, the communiqué stated that the Federal Government received N112.148  billion, the State Governments received N56.883 billion and the Local Government Councils received N43.855 billion. The sum of N71.830 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.

    The Federal Government received N69.969 billion, the State Governments received N233.229 billion and the Local Government Councils received N163.260 billion from the N466.457 billion distributable Value Added Tax (VAT) revenue.

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    A total sum of N2.704 billion was received by the Federal Government from the N18.024 billion Electronic Money Transfer Levy (EMTL).  The State Governments received N9.012 billion and the Local Government Councils received N6.308 billion.

    The Federal Government received N205.591 billion from the N438.884 billion Exchange Difference revenue.  The State Governments received N104.279 billion and the Local Government Councils received N80.394 billion.  The sum of N48.620 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.

    The communiqué noted significant increases in Oil and Gas Royalties, Companies Income Tax (CIT), Excise Duty, Petroleum Profit Tax (PPT), Electronic Money Transfer Levy (EMTL), and CET Levies, while Import Duty and Value Added Tax (VAT) saw considerable decreases.

    The communiqué also reported that the balance in the Excess Crude Account (ECA) still stands at $473,754.57 as of the end of April 2024.

  • FAAC distributes N1.123 trillion for March 2024

    FAAC distributes N1.123 trillion for March 2024

    • VAT revenue up despite lower overall collections

    The Federation Account Allocation Committee (FAAC) has disbursed a total of N1.123 trillion to the Federal Government, States, and Local Government Councils for the month of March 2024.

    This information was revealed in a communique issued by FAAC at the end of its April 2024 meeting.

    The N1.123 trillion distributed revenue was broken down as: Distributable statutory revenue, N311.233 billion; Distributable Value Added Tax (VAT) revenue, N511.879 billion; Electronic Money Transfer Levy (EMTL) revenue, N14.754 billion and Exchange Difference revenue, N285.525 billion.

    While the total distributable revenue was lower than February’s N1.192 trillion by N69 billion, there were some bright spots. 

    Gross revenue available from Value Added Tax (VAT) in March 2024 was N549.698 billion, a significant increase of N89.210 billion compared to February’s N460.488 billion. This suggests increased economic activity, particularly in sectors that generate VAT.

    Gross statutory revenue for March 2024 was N1.017 trillion, lower than the N1.192 trillion received in February.  The communiqué did not specify reasons for the decline. Electronic Money Transfer Levy (EMTL) revenue also dipped slightly compared to February.

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    The N1.123 trillion was distributed as follows: Federal Government, N345.890 billion; State Governments: N398.689 billion; Local Government Councils: N288.688 billion. Additionally, a total of N90.124 billion (13 percent of mineral revenue) was shared to the benefiting States as derivation revenue.

    The communiqué provided a more detailed breakdown of the distribution by revenue source:

    Distributable statutory revenue: Federal Government, N133.960 billion; State Governments, N67.946 billion; Local Government Councils, N52.384 billion; Derivation Revenue (13 percent of mineral revenue), N56.943 billion.

    Distributable Value Added Tax (VAT) revenue: Federal Government, N76.782 billion; State Governments, N255.940 billion; Local Government Councils, N179.158 billion.

    Electronic Money Transfer Levy (EMTL): Federal Government, N2.213 billion; State Governments, N7.377 billion; Local Government Councils, N5.164 billion

    Exchange Difference revenue: Federal Government, N132.935 billion; State Governments: N67.426 billion; Local Government Councils, N51.983 billion and Derivation Revenue (13 percent of mineral revenue), N33.181 billion

    The communiqué noted an increase in Import Duty, VAT, Gas Royalty, and Company Income Tax (CIT) for March 2024 compared to February.  However, there were also decreases in Excise Duty, Oil Royalty, Petroleum Profit Tax (PPT), Electronic Money Transfer Levy (EMTL), and Customs and Excise Tariff (CET) Levies.

    The communiqué also revealed that the balance in the Excess Crude Account (ECA) stood at $473,754.57 as of March 2024.

    The FAAC disbursement report provides valuable insights into Nigeria’s revenue generation and allocation patterns.  While overall collections dipped slightly in March compared to February, the increase in VAT revenue is a positive sign. 

  • FAAC distributes N1.123tr for March 2024

    FAAC distributes N1.123tr for March 2024

    The Federation Account Allocation Committee (FAAC) has disbursed N1.123 trillion to the Federal, State and Local Government Councils for March 2024.

    This was contained in a communique by FAAC at the end of its April 2024 meeting.

    The N1.123 trillion distributed revenue was broken down as: Distributable statutory revenue, N311.233 billion; Distributable Value Added Tax (VAT) revenue, N511.879 billion; Electronic Money Transfer Levy (EMTL) revenue, N14.754 billion and Exchange Difference revenue, N285.525 billion

    While the total distributable revenue was lower than February’s N1.192 trillion by N69 billion, there were some bright spots.

    Gross revenue available from Value Added Tax (VAT) in March 2024 was N549.698 billion, a significant increase of N89.210 billion compared to February’s N460.488 billion. This suggests increased economic activity, particularly in sectors that generate VAT.

    Gross statutory revenue for March 2024 was N1.017 trillion, lower than the N1.192 trillion received in February. The communique did not specify reasons for the decline. Electronic Money Transfer Levy (EMTL) revenue also dipped slightly compared to February.

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    The N1.123 trillion was distributed as follows: Federal Government, N345.890 billion; State Governments: N398.689 billion; Local Government Councils: N288.688 billion. Additionally, a total of N90.124 billion (13 percent of mineral revenue) was shared to the benefiting States as derivation revenue.

    The communique provided a more detailed breakdown of the distribution by revenue source:

    Distributable statutory revenue: Federal Government, N133.960 billion; State Governments, N67.946 billion; Local Government Councils, N52.384 billion; Derivation Revenue (13 percent of mineral revenue), N56.943 billion.

    Distributable Value Added Tax (VAT) revenue: Federal Government, N76.782 billion; State Governments, N255.940 billion; Local Government Councils, N179.158 billion.

    Electronic Money Transfer Levy (EMTL): Federal Government, N2.213 billion; State Governments, N7.377 billion; Local Government Councils, N5.164 billion

    Exchange Difference revenue: Federal Government, N132.935 billion; State Governments: N67.426 billion; Local Government Councils, N51.983 billion and Derivation Revenue (13 percent of mineral revenue), N33.181 billion

    The communique noted an increase in Import Duty, VAT, Gas Royalty, and Company Income Tax (CIT) for March 2024 compared to February. However, there were also decreases in Excise Duty, Oil Royalty, Petroleum Profit Tax (PPT), Electronic Money Transfer Levy (EMTL), and Customs and Excise Tariff (CET) Levies.

    The communique also revealed that the balance in the Excess Crude Account (ECA) stood at $473,754.57 as of March 2024.

    The FAAC disbursement report provides valuable insights into Nigeria’s revenue generation and allocation patterns. While overall collections dipped slightly in March compared to February, the increase in VAT revenue is a positive sign.

    The detailed breakdown by revenue source and tier of government allows for a deeper understanding of how these resources are distributed.

  • FAAC, revenue agencies in N1.7tr shortfall talks

    FAAC, revenue agencies in N1.7tr shortfall talks

    Three federal revenue-generating agencies – the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Federal Inland Revenue Service (FIRS) are in the process of reconciliation with the Federation Account Allocation Committee (FAAC) over a shortfall of N1.7 trillion in the February inflow.

    The shortfall was traced to these agencies by the Post-Mortem Sub-Committee (PMSC) of the FAAC in its March report.

    The report stated that “the total unresolved amount due to the Federation Account from the reconciliation meeting held with the Revenue Generating Agencies in March, 2024 was $36,329,376.24 or N1,782,608,213,106.87

    “The Nigerian National Petroleum Corporation (NNPC) Limited and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), owe N1.1 trillion ($35.7 million).”

    The FIRS is in deficit of N665.5 billion ($0.6 million).

    The report did not specify the cause of the shortfall, but it said there is an ongoing reconciliation efforts between the revenue generating agencies and the PMSC.

    These efforts aim to resolve the discrepancies and ensure all due funds are paid into the Federation Account.

    However, Chairman of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) Mohammed Shehu told The Nation that “the actual amount of the shortfall will be determined after after reconciliation. What usually happens is the distribution of maybe two months ago comes in late because the data and all these reconciliation have not yet taken place.

    “So, of course you know what we went through in the last administration, some of these things are bound to happen and we are trying to prevent this kind of situation. All the parties involved are trying to work things out.”

    The PMSC report highlighted some progress in recovering outstanding funds.

    It was able to reconcile and confirm payment of over N106 billion ($101.3 million) from previous arrears in January.

    This included: N441.5 million from NNPCL related to November 2023 crude oil and gas revenue; over N61.7 billion from NUPRC for royalty payments from October/November 2023 and N44.2 billion from NUPRC for GVC Forcados/Brass Terminal revenue.

    The report also mentioned that outstanding payments from before June 2023 are being handled by a separate “Stakeholders Alignment Committee”.

    Read Also: FAAC disburses N1.15tr to Fed Govt, states, councils

    The report revealed an ongoing disagreement between the NNPCL and the Central Bank of Nigeria (CBN) regarding the appropriate exchange rate to be used for revenue calculations.

    The CBN sets the official exchange rate, but the NNPCL reportedly used a “weighted average rate” for some calculations in 2023.

    According to the report, “the sub-committee further analyzed the implication of the use of the weighted average rate on PMS importation and discovered that the Exchange Rate Differential from June to December, 2023 was N937, 961,442,969.83 contrary to NNPCL claim of N1, 675,920,811,819.

    “The sub-committee resolved that NNPCL should reconcile the PMS exchange rate differentials for the period June to December, 2023 and also provide authorisation for the use of weighted average exchange rate.

    The unremitted funds represent a significant shortfall for the Federation Account, which is used to distribute revenue among the federal, state, and local governments.

    The shortfall could impact government spending plans and budgets across the country.

    The outcome of the ongoing reconciliation and the resolution of the exchange rate dispute will be crucial in determining the final amount recovered by the Federation Account.

  • FAAC disburses N1.15tr to Fed Govt, states, councils

    FAAC disburses N1.15tr to Fed Govt, states, councils

    The  Federation Account Allocation Committee (FAAC) has disbursed   N1.15 trillion to the three tiers of government for last month.

    Last month’s revenue into the federation account was  N2.33 trillion, with deductions and savings of N1.17 trillion, including the cost of collection, transfers, interventions, refunds and savings of N250 billion.

    Notable highlights from the distributable revenue of N1.15 trillion include gross statutory revenue of N1.19 trillion, surpassing January’s figure by N40.62 billion and  Value Added Tax (VAT), N460.49 billion, exceeding January’s amount by N39.76 billion.

    Additionally, oil-producing states received N166.24 billion as derivation revenue.

    Read Also: FAAC’s monthly revenue hits N2.07tr

     The  Federal Government received N352.41 billion out of the  N1.15 trillion; states got  N366.95 billion, while local governments received N267.15 billion.

    From the N101.349 billion distributable statutory revenue, the Federal Government got  N7.351 billion,  states,  N3.729 billion and local governments, N2.875 billion.

     The sum of N87.394 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue.

    From  the N428.806 billion distributable VAT revenue, the  Federal Government received N64.321 billion,  states, N214.403 billion and the local governments,   N150.082 billion

    About  N15.157 billion Electronic Money Transfer Levy (EMTL) was shared as follows:  Federal Government,  N2.274 billion; states,  N7.578 billion and the local governments  N5.305 billion.

  • FAAC’s monthly revenue hits N2.07tr

    FAAC’s monthly revenue hits N2.07tr

    A total revenue of N2.068 trillion was paid into the Federation Account last month.

    Deductions for the cost of collection were N78.412 billion;  total transfers, interventions and refunds, N639.926 billion; and savings, N200.000 billion.

    After the deductions, the Federation Account Allocation Committee (FAAC) shared   N1.149 trillion to the  three tiers of government –federal, state  and Local Government Areas.

    The balance of N919 billion was saved in a special account created after fuel subsidy removal on  May 29, 2023. Excess Crude Account (ECA), however,  still stands at $473,754.57.

    Bawa Mokwa, Director (Press and Public Relations) in the Office of the Accountant-General of the Federation (OAGF), said in a statement yesterday that “the revenue was shared at the February 2024 meeting of the Federation Accounts Allocation Committee (FAAC) chaired by the Minister of Finance and Coordinating Minister for the Economy, Wale Edun.”

    Mokwa, quoting a communique by FAAC, added that N279.028 billion was recorded as  gain from FX fluctuations.

    He said:  “The N1.149 trillion total distributable revenue comprised distributable statutory revenue of N463.079 billion; distributable Value Added Tax (VAT) revenue of N391.787 billion; Electronic Money Transfer Levy (EMTL) revenue of N15.922 billion;  and Exchange Difference revenue of N279.028 billion.

    “Interestingly the federation account benefitted  N279.028 billion from the January crash of the Naira.

    The inflow of N279.028 billion from Exchange Rate differentials in January 2024 signifies the gains realised from favourable exchange rate movements on foreign currency transactions or investments that were translated into the local currency, ultimately boosting the financial position of the federation account.

    “In other words, the dollar rate at which the nation sold crude oil resulted as a blessing to the federation account when the Naira fell.”

    The OAGF spokesman added that the gross statutory revenue of N1.151 trillion was received for January 2024.

    “This was higher than the sum of N875.382 billion received in December 2023 by N276.426 billion,” he said. 

    According to him, “  gross revenue available from the Value Added Tax (VAT) in January 2024 was N420.733 billion.  This was lower than the N492.506 billion available in December 2023 by N71.773 billion.”    

    Mokwa’s statement reads: “The communique stated that from the N1,149 trillion total distributable revenue, the Federal Government received a total of N407.267 billion, the State Governments received N379.407 billion and the Local Government Councils received N278.041 billion.

    “A total sum of N85.101 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.

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    “From the N463.079 billion distributable statutory revenue, the Federal Government received N216.757 billion, the State Governments received N109.942 billion and the Local Government Councils received N84.761 billion. The sum of N51.619 billion (13 percent of mineral revenue) was shared with the benefiting states as derivation revenue.

    “The Federal Government received N58.768 billion, the State Governments received N195.894 billion and the Local Government Councils received N137.125 billion from the N391.787 billion distributable Value Added Tax (VAT) revenue.

    “The N15.922 billion Electronic Money Transfer Levy (EMTL) was shared as follows: the Federal Government received N2.388 billion, the State Governments received N7.961 billion and the Local Government Councils received N5.573 billion.

    “The Federal Government received N129.354 billion from the N279.028 billion Exchange Difference revenue.  The State Governments received N65.610 billion, and the Local Government Councils received N50.582 billion. The sum of N33.482 billion (13% of mineral revenue) was shared with the benefiting states as derivation revenue.

    “In January 2024, Companies Income Tax (CIT), Import Duty, Petroleum Profit Tax (PPT) and Oil and Gas Royalties increased significantly, while  Value Added Tax (VAT), Export Duty, Electronic Money Transfer Levy (EMTL) and  CET Levies decreased considerably. “ 

  • FG publishes all FAAC allocations in 2023

    FG publishes all FAAC allocations in 2023

    The federal government has published all the monthly allocations to the three tiers of government for 2023.

    Office of the Accountant General of the Federation (OAGF) said it published all the allocations to entrench transparency and accountability.

    The OAGF gave this explanation in a statement it issued in Abuja on Thursday, February 15.

    Bawa Mokwa, Director of Press at the OAGF explained that the Office: “is consistent in publishing the details of the monthly revenue allocation by the Federation Accounts Allocation Committee (FAAC) to the three tiers of government.”

    Mokwa said: “The OAGF is up to date in the publication of the monthly revenue distribution, this effort would be sustained.

    Read Also: States celebrate as November FAAC allocation tops N1trillion

    “In line with the policy of the Office of the Accountant General of the Federation to keep Nigerians abreast with government financial inflows and expenditure, the Office has completed the publication of the monthly revenue distribution for 2023.”

    The OAGF said the revenue distribution for 2023 was published monthly in print and online media as well as on its website. 

    According to the OAGF, the details of the December 2023 revenue which was shared in January 2024 have already been published on its website.   

    Mokwa vowed that OAGF would continue “to entrench transparency and accountability in government financial transactions and uphold the ideals of prudent financial management”.

  • FAAC and its trillions

    FAAC and its trillions

    • With purposeful leadership, current accruals can still help mitigate some of our challenges

    If we may borrow the increasingly familiar cliché: the town is not smiling – to sum up the current situation in the country, there is, equally a lot to say of the vast improvements in the accruals to all tiers of government from the federation account that should ordinarily help to mitigate the current cycle of pains on the citizenry.

    Call it an all-too-familiar paradox: whereas the Federation Account Allocation Committee (FAAC) figures have been going up, courtesy of the oil subsidy removal and the foreign exchange liberalisation; so has been a steady downturn in the standards of

     living of the ordinary citizen.

    And whereas the Bola Tinubu administration considers the twain – oil subsidy removal and the foreign exchange liberalisation – as pivotal to the nation’s future development aspirations, it is, understandably, for the ordinary citizen a pill too bitter to swallow.

    The states have certainly been in the rejoicing mode since July, last year, when FAAC first shared a record N1.959 trillion, nearly tripling the preceding month’s allocation of N786.161 billion. Only last week, the committee shared a total sum of N1.13 trillion in December 2023 among the federal, states, and local governments.

    To say that the country has tottered towards an emergency in the aftermath is merely stating the obvious. Cost of living has grown to monstrous levels. Youth unemployment is at the highest levels ever; inflation is on the rampage even as the infrastructure gap continues to widen. With the monster of insecurity of every shape and description adding to the toxic mix, the country can truly be said to be sailing in perilous waters.

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    We do of course agree that money may not necessarily answer to all things. After all, we have seen, times without number, mind-boggling sums thrown at problems with very minimal results to show. But the hard truth is that a number of the challenges the country currently faces can be addressed with good thinking and purposeful, deliberative application of the limited funds. Whether in the upgrade of schools, basic healthcare, road infrastructure, or even in the security sector currently reeling under the yoke of criminal elements, the country cannot be said to be lacking in the resources to mitigate the current hardship in the country. What is increasingly apparent is corruption and weak governance. To say the least, there are, most certainly, ample resources for well-conceived programmes with eyes on the future as against placebos which only seek to paper over fundamental problems. The real challenge comes to getting every level of government to re-order their priorities in such a way as to put the welfare of citizens at the front burner.

    Unfortunately, whereas the Federal Government appears to have shown considerable leadership in terms of its appreciation of the imperative of the moment, state governments, save for one or two exceptions, have either been too lethargic or appear utterly incapable of rising to the occasion.

    Yet, in the current challenges lie boundless opportunities that should not be missed. While the current accruals might in fact be a drop in the ocean of the nation’s complex needs, a commitment to identified priorities, better and more judicious channelling of the appropriated funds, can only in the end offer the country a chance at a new beginning.

    Take the notorious example – the 13 million Nigerian kids said to be out of school. For how long has the problem endured? What is the share of each state in the national shame? And how much will each require to shake off the blight – in terms of the number of classrooms to be built, the soft motivators like school feeding and provision of basic items?

    How about a special programme and a federal matching grant for states wiling to pick up the gauntlet? How could the Universal Basic Education Commission (UBEC) be made to deliver more in this particular regard?

    What of the security sector – which continues to gulp billions of naira annually in the so-called security votes – funds, which although are almost exclusively the preserve of governors, but are more than often frequently abused? Is it not now obvious that a new and different kind of paradigm is needed, both in terms of the funding and the enabling architecture? Why should the governors in particular, see the fund as entitlement with almost no strictures of oversight in place?

    The point above is to underscore the fact that whereas the times are understandably hard, challenging and so demanding of citizens’ maximum sacrifice, the issue, more often than not, is not all about money and more money; it is poor governance, particularly the proclivity of the leadership to chase shadows that have allowed the nation’s many malignancies to fester. The times are such that call for a rethinking of governance.

  • Unviable states?

    Unviable states?

    • Lax approach to revenue generation more to blame  

    Although the Economic Confidential, in its Annual States Viability Index (ASVI) 2022 report, found that six states – Bayelsa, Kebbi, Katsina, Akwa Ibom, Taraba and Yobe – cannot survive without the allocation from the Federation Account Allocation Committee (FAAC), what is evident in the entirety of the report is how very little has changed in the states in terms of their disposition to internally generated revenue. The six – the so-called basket cases – are said to have stood out because their Internally Generated Revenues (IGR) in 2022 fell below 10% of their receipts from FAAC.

    “The index carefully and painstakingly computed proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable, and cannot survive without the federally collected revenue, mostly from the oil sector”, the report stated.

    Lagos and Ogun remain the clear leaders, with their IGR surpassing their shares from the federally distributive pool. In fact, Lagos’ IGR of N651bn is higher than that of 30 other states put together. As against a federal allocation of N370bn, it netted N651bn in IGR (176%). Ogun was no less impressive: with federal allocation of N113bn, the state netted N120bn in IGR (106%).

    The modest performers are: Rivers, which prides itself as the ‘Treasure Base of the Nation’ but has only N172bn IGR, representing 48% of its FAAC allocation of N363bn; Kaduna State, with N58bn IGR, representing 37% of its FAAC allocation of N155bn; Kwara, with IGR of N35bn compared with its FAAC allocation of N99bn, representing 36%; Oyo, which generated N62bn but took N181bn from FAAC, representing 34%; and Edo generated N47bn IGR compared with N147bn FAAC allocation, representing 32%.

    Of the six cases, Bayelsa and Akwa Ibom, two foremost oil producing states, best exemplify the paradox of wealth without work, blessings without value addition, even as the other four – Kebbi, Katsina, Taraba and Yobe – stand apart on the nation’s totem pole of leadership surrender or utter lack of imagination.

    The ASVI report is as commendable as it is instructive. Unfortunately, the very notion that some states are unviable misses the very important point, which is that none of the states in question could be said to be poor in natural endowment terms. Most of them literally sit on top of gold but which, no thanks to our warped federalism, are under exclusive control of the Federal Government. But the reason they are ‘unviable’ is because successive leaderships, once guaranteed the regular flow from the federation account, have no incentive to complement this with an aggressive tax drive.

    In fact, there have been reports of some state governors only showing up in their state capitals days after the monthly FAAC meeting, only to return to Abuja after dishing out instructions on how the allocation would be spent. Even their bureaucracies are said to be little more than ghost towns soon after the sharing is done. In many of the states, the internal revenue agencies, neither primed for efficiency nor with a clear target set for them, exist only in name as an extension of their indolent, unproductive bureaucratic setups.

    Read Also: States celebrate as November FAAC allocation tops N1trillion

    Surely, the states could do a lot more. Clearly, the Lagos example has proven that this is doable. A good way to start is for the affected states to overhaul their revenue collection agencies for greater efficiency, transparency, and results. While there is a lot to say about the need to review the current skewed arrangement under which the Federal Government retains both the larger share of the national revenue as well as exclusive control of all minerals, it goes without saying that the states also need to prove their mettle in the collection of all legitimate revenues.

    Ultimately, without incentives of sorts in place to reward star performers, and sanctions for the laggards, it seems unlikely that those states would ever sit up.