From Uche Usim, Abuja
The Federal Government ‘s huge borrowing again took a toll on its project funding programmes as a whopping N513 billion representing 40.27 per cent of N2.8 trillion disbursed through the Federal Accounts Allocation Committee (FAAC) in the first quarter of 2017 was spent on debt servicing.
This was even as the three tiers of government shared N2.788 trillion in the first half of 2017, representing a 38 per cent increase in disbursements compared to N2.019 trillion shared in 2016. The Nigeria Extractive Industries Transparency Initiative (NEITI) says the country suffered significant revenue decline in terms of projected Federal Account Allocation Committee (FAAC) disbursement.
Out of $2.788 trillion disbursed in the first half of 2017, the Federal Government received N1.09 trillion, and the 36 state governments got N923 billion while N549.8 billion went to 774 local governments in the country.
A further breakdown shows that total releases to the three tiers of government was N430.16 billion in January, N514 billion in February, N496.40 billion in March, N418.82 billion in April, N418.82 billion in May and N462.36 billion in June.
NEITI’s disclosure was contained in its quarterly review, which focuses on disbursements by FAAC.
Its spokesman, Dr. Orji Ogbonnaya Orji, said the review was based on data obtained by NEITI at the meetings of FAAC and data from National Bureau of Statistics (NBS), Office of the Accountant General of the Federation, Federal Ministry of Finance and the Debt Management Office (DMO). He further disclosed that N513 billion was spent on debt servicing by the three tiers in the first quarter.
“This was against the N1.276 trillion disbursements in the first quarter. This means that debt servicing took up 40.27 per cent of FAAC disbursement for the first quarter of this year.
“The figure reveals that debt servicing as a proportion of total FAAC allocations is generally higher in the first quarter of the year, after which it fell to lower levels. Based on this, the figure of 40.27 per cent observed in the first quarter of 2017 might be an upper threshold and it would thus be expected that this figure will be lower for the remaining quarters of the year,” Orji stated.
According to him, while the expected FAAC disbursement for the three tiers of government was N4.7 trillion, the actual FAAC disbursement to them was N2.788 trillion, representing a shortfall of over 40.67 per cent.
“The volatile nature of disbursements to all tiers of government in the first half of 2017 would suggest difficulty in implementing budgets at the federal, state and local government levels. The volatility in revenue inflows will adversely affect planning and expenditure of government and thus likely hamper efforts at stimulating growth and development.”
However, NEITI said the DMO was yet to provide data on the figure for the second quarter of 2017. The agency expressed concern that the nation’s debt in relation to revenues appeared to have reached critical levels.