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Oil-producing states borrow N1.3tn amid N6.4tn windfall

The overall indebtedness of ten oil-producing states increased from N2.04tn in December 2015 to N3.35tn in June 2022, according to the Debt Management Office’s statistics on subnational debt.

This indicates that the states borrowed a total of N1.31 trillion over a period of almost seven years.

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Rivers, Akwa Ibom, Delta, Edo, Abia, Ondo, Imo, Cross River, Bayelsa, and Lagos are the ten states.

The PUNCH discovered that the oil-producing states received a total of N6.4 trillion in federal allocation plus a 13 percent derivation fund.Information Guide Nigeria

Zainab Ahmed, Minister of Finance, Budget, and National budget, stated Thursday at the sixth edition of the PMB Administration Scorecard that the Federal Government released a total of N1.98tn to oil-producing states as its part of the 13 percent derivation fund.

She added that the sum was paid up in seven years, despite the fact that some of the monies were allocated prior to the present government.

She said, “One of the key functions of the Ministry of Finance Budget and National Planning is in support of states. The President understands very clearly that this economy wouldn’t have been growing consecutively or wouldn’t have been able to pull ourselves out of recession twice.

“We wouldn’t have been able to grow consistently without enabling the states to grow because it is a federation.

“Mr. President has been very uniquely generous in his support to states. I can say no president has provided the level of support provided to the states of the Federation.

“He understands that the federating units need to work together as one to achieve the targets that he has set for the country. So, everybody goes to support sub-national governments.

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“In seven years, we have disbursed N1.98 trillion in funds to oil-producing states.”

The PUNCH recalls that the 13 per cent derivation fund has been a controversial issue after comments by Rivers State Governor, Nyesom Wike, alleging that the oil-producing states had refused to disclose their own shares paid by the Federal Government from 1999 to all the Niger Delta States.NYSC portal

Ahmed further said that the government had supported states of the federation N5.03tn and an additional $3.4bn since 2015.

She said, “With respect to sub-national governments, the ministry goes over and above its statutory role to provide financial support to States:

“A total of N5.03tn plus an additional $3.4bn has been released to states by the Federal Government over the life of this administration.

“Each of these payments has distinct repayment terms with some given as grants and others as loans with favourable repayment terms, including a long amortisation period.

“The support covers the 13 per cent Derivation refund to oil-producing states, refunds for construction of federal roads, ecological support, support from the Development of Natural Resources Fund, Paris Club refunds, support from the Stabilisation Fund, COVID intervention amongst others.”

“Today, I call your attention to the very high performance of the non-oil sector of our economy. As of September 2022, the Federal Government’s share of oil revenues to fund the budget was N535.5bn representing 32.6 per cent performance), while non-oil tax revenues totalled N1.71tn an outturn of 100.7 per cent compared to the budget projection.JAMB portal

“The non-oil revenue share of funding the Federal Government has improved. We have been able to move from contributing 35 per cent to the federal budget to contributing 73 per cent to the financing of the federal budget.”

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N6.4tn windfall

According to data compiled by The PUNCH from the National Bureau of Statistics, oil-producing states received N4.46tn from the Federation Account Allocation Committee between 2016 and 2020. Adding the N1.98tn allotted to oil-producing states as a part of the 13% derivation brings the total to N6.4tn.

During the time under review, Delta received the most allocation of N804,27 billion, while Cross River received the least at N147,86 billion.

Other states’ allocations were as follows: Akwa Ibom, N769.19bn; Lagos, N523.63bn; Rivers, N675.54bn; Edo, N255.32bn; Abia, N225.47bn; Ondo, N250.86bn; Imo, N234.37bn; and Bayelsa, N575.39bn.

According to the National Bureau of Statistics, FAAC receives oil earnings and related taxes, revenues from the Nigerian Customs Service, corporation income tax, proceeds from the sale of national assets, and surplus and dividends from state-owned enterprises.JAMB Result

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Emediong Silver

Emediong Ekpe is a graduate of English. A professional Sports journalist/analyst, and a spoken word artist. He is passionate about decimating information and putting smiles on people's faces via news writing. Whatapp: 08088735884

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