By Francis Ogwo
Between January and November, 2019, reports made available by the National Bureau of Statistics indicated that state governments in Nigeria shared the sum of N2.53 trillion gross allocation.
Under this allocation, the Southern region got N1.385 trillion while the Northern region received N1.088 trillion.
The breakdown in sub regions showed that North Central got N364.6bn which represent 14.7%, South-West received N335.8bn representing 13.6% of the total, North-East got N301.6bn also 12.2%, while South-East recieved N258.6bn representing 10.5% of the total allocation and South-South region receiving N790.8bn which represented 32% of the total allocation.
Analysis of the information, however, showed a drop in the allocation to states in 2019 as compared to 2018. This was obvious with a N49.56 billion drop.
There was a significant drop in the Federal Allocation to N2.53 trillion in 2019, from N2.58 trillion allocated within the period in 2018.
The record of allocation showed that in 2019, the top 10 states that received the largest portion of the federal allocation were Delta, Akwa Ibom, Rivers, Lagos, Bayelsa, Kano, Kaduna, Edo, Katsina and Imo. Meanwhile, major oil-producing states suffered decline in the allocation.
In the South-South, Delta State had the highest allocation and also the biggest recipient among the states with a total sum of N214.4 billion. There was a drop in the allocation by N1.05 billion as compared to the N215.4 billion it received in 2018. Akwa Ibom ranked second with a total sum of N169.79 billion gross allocation within the period. The state also had a drop by N27.8 billion when compared to 2018.
Rivers ranked third on the list with a gross allocation of N154.5 billion, a N15.3 billion decline from the N169.8 billion received in 2018.
Bayelsa had a decline in gross allocation to N143.8 billion in 2019 as against N157.4 billion in 2018.
South-West Region had an allocation of N335.8bn which was 13.6% of the total allocation. In this region, Lagos State had an increment in the allocation received. This was from N143.9 billion in 2018 to N152.4 billion in 2019.
In the North-West, a total of N421.8bn amounting to 17.1% of the allocation was received. Kano had the highest allocation with N82.3 billion while Kaduna had N66.9 billion with Katsina receiving N62.5 billion respectively.
Analysts have said it is important to note that gross allocation to all states in Nigeria is subjected to a number of deductions.Monthly allocation reports showed that deductions from monthly allocation to states include external debt payment, bail-out fund, National water rehabilitation projects, National Agricultural Technology Programme, payment for fertilizer, state water supply project, State Agricultural Project and National Fadama Project.
Reports have indicated that states got N614 billion in form of budget support facility (bail-out fund) from the Federal Government to pay salary arrears in 2016. Therefore, deductions are removed on a month-on-month basis from the states’ allocation thereby leaving some states with uncertainties in 2020.
The Federal Government has already mounted pressure on state governors towards a speedy recovery of the bail-out funds.
In 2019, the total deductions made by the Central Bank of Nigeria from the federal allocation totalled N250.2 billion.
According to the breakdown, bailout funds and other deductions stood at N214.2 billion, while external debt deductions were put at N36.05 billion.
On the deductions, Osun had the highest of N16.76 billion deducted from the state allocation. Delta followed with N13.65 billion deductions.
Bayelsa’s stood at N13.07 billion, while Ogun State recorded N12.99 billion deduction from its federal allocation
Akwa-Ibom and Imo States also recorded N12.12 billion and N10.15 billion deductions from federal allocation respectively.
In summary, the Federal Government collected revenues of $3.5 trillion in 2019, which is equal to about 16.3 percent of Gross Domestic Product (GDP).
Analysts opined that due to the global recession in 2016, Nigeria’s economy plunged into hard times with several states unable to meet obligations bin salaries.
Observers and analysts of economic trends had forecasted a bright future in 2020.
This was however truncated with the unforseen invasion of the global economy by COVID-19 and its harsh effects on economy.
The future of states earnings and deductions seems uncertain even as the year wraps up.
