NEITI Urges Government to Limit Spending as Oil Price Hits $70 per Barrel
The Nigeria Extractive Industries Transparency Initiative (NEITI) has cautioned the three levels of Government against unbridled spending following the steady rise in the price of crude Oil. The Agency, in the latest edition of its quarterly review released in Abuja yesterday, said the Federation Account Allocation Committee (FAAC) disbursed N1.938 Trillion in the first quarter of 2018.
The amount shared represented an increase of 37.3 per cent when compared with N1.411 Trillion shared during the same period in 2017 and 71.1 per cent of the N1.132 Trillion shared in the same quarter of 2016.
A breakdown of the FAAC allocations shows that the Federal Government received N812.8 Billion, the 36 States got N683.4 Billion, while N393.3Billion went to the 774 Local Councils. A further breakdown shows that N655.2 Billion was disbursed by FAAC in January, N635.6 Billion in February, and N647.4 Billion in March this year.
The report was quick to caution against celebrating the amounts disbursed in the first quarter of 2018 because of the volatility of the International Oil Market. “The year started on a bright note as all tiers of Government received higher revenues than corresponding quarters in the past two years. This was largely on the account of sustained increase in domestic Oil production and global Oil prices,” the NEITI report noted.
On allocations received by each state, the report reveals that Akwa Ibom got the highest amount of N50.44 Billion while Osun State received the lowest net share of N4.99 Billion, a variance of 920 per cent between the highest and the lowest. The NEITI report explained that the disparities in FAAC disbursements suggest differences in revenue capacities of different States and the implications for expenditure decisions in the affected States.
The publication expressed concerns about the relationship between the projected revenues of States and their proposed budgets. It also observed that the budget of all States completely outstrips their projected total revenues.
For instance, the publication observed that the gap between projected total revenues and budgets is small in some states like Kano, Enugu, Delta and Bayelsa, saying the projected revenue is at least 60 per cent of the budgets in these states.
It said that even with increasing trends in the revenue disbursements to the three tiers of Governments, the disbursement in the first quarter of 2018 is still 25.6 per cent lower than the N2.6 Trillion disbursed during the same period in 2013 before the crash in global Oil prices.
Meanwhile, Finance Minister, Kemi Adeosun has said that the country’s tax payers’ base rose from 14 million in 2016 to 19 million in 2018, grossing additional five million tax payers into the system.
The Minister made this known yesterday in Abuja at a meeting with a World Bank Mission of 10 Executive Directors led by Mr. Patrizio Pagano. Adeosun stated that Government would mobilise more revenues to drive its growth plan for the economy and also accelerate Nigeria’s growth level and also improve the ‘Ease of Doing Business’ in the country. She explained that Government have been able to grow the tax payers’ base to 19 million in two years from the 65 million economically active people who are not tax compliant.
The Leader of the World Bank Mission to Nigeria, Patrizio Pagano, explained that the team was in the country to acquaint itself with the Government’s growth and power priorities. The World Bank officials had earlier met with the organised private sector in Lagos and undertaken a tour of LAPO Microfinance project in Lagos.