According to the latest data released by the Federation Account Allocation Committee (FAAC), the Federal Government (FG), along with the 36 states and 774 local governments (LG) in Nigeria, shared a total of N2.84 trillion as statutory allocation from January to April 2023.
This figure reflects a 7.98 percent year-on-year (YoY) increase compared to the corresponding period in 2022.
While the overall allocation showed a YoY growth, there was a monthly downward trend observed during the four-month period. In January, the total allocation stood at N750.2 billion.
However, the figures declined in subsequent months, with February experiencing a 3.67 percent decrease to N722.6 billion, followed by a further 1.1 percent decline to N714.6 billion in March.
The trend continued in April, with allocations dropping by 8.2 percent to N655.9 billion.
Breaking down the allocation, the Federal Government received N1.07 trillion during the period, marking a 5.9 percent YoY increase from N1.01 trillion received in the same period of 2022.
The states received N931.85 billion, representing a 12 percent rise from N828.8 billion, while the local governments received N685.88 billion, a year-on-year increase of 11.9 percent from N612.5 billion in 2022.
Additionally, allocations from Value Added Tax (VAT) witnessed a significant YoY increase of 19.5 percent, reaching N880.16 billion in 2023, compared to N736.06 billion in 2022.
However, the 13 percent derivation fund, which is specifically received by oil-producing states, experienced a YoY decrease of 32 percent, amounting to N132.7 billion in 2023, down from N196.07 billion in 2022.
This decline can be attributed to the decrease in crude oil production during March and April 2023.
Crude oil production in January 2023 stood at 1.25 million barrels, and it increased by four percent to 1.3 million barrels in February.
However, it subsequently dropped by three percent to 1.26 million barrels in March.
The downward trend continued in April, witnessing a significant decrease of 21.5 percent to 998,602 barrels.
The fluctuations in the monthly allocations and the decline in crude oil production highlight the challenges faced by Nigeria’s economy during the first four months of 2023.
It emphasizes the need for careful financial management and diversification strategies to mitigate the impact of such fluctuations in the future.
