How Judicious are Higher Revenue Allocations utilized?

By Abubakar Jimoh

Effort to raise public consciousness on extractive revenue allocation and utilisation at all levels brought to the fore, the simplified Fiscal Allocation and Statutory Disbursement (FASD) Audit published by Civil Society Legislative Advocacy Centre (CISLAC) with support from Oxfam Novib.

The publication, which simplified FASD Audit, covering the period 2007 to 2011 aims at: bringing to limelight in simple and understandable methodology, various revenues from the extractive industries paid into the Federation Account as well as their distribution to and receipt by the various tiers of government and other beneficiaries; improving public awareness and confidence in governance by educating the civil society of the utilisation of revenues realised by the Federal Government; enhancing public governance and awareness through provision of timely and current information and data that would form the basis for revenue allocation, disbursements and use in Nigeria.

A recent report by Niger Delta Development Commission (NDDC) identified Akwa Ibom, Bayelsa, Rivers, Delta, Ondo, Abia, Imo, Edo Cross River, and Anambra as oil producing states in Nigeria. These States are entitled to 13% derivation allocation from oil production making them the highest revenue earners from the Federation Account. The Simplified FASD Audit presents total sums allocated to the oil producing states between 2007 and 2011 as: Rivers, N1.17tr; Akwa Ibom, N972.7bn; Delta, N771.8bn; Bayelsa, N640.7bn; Ondo, N340.6bn; Imo, N237.6bn; Cross Rivers, N217.3bn; Edo, N217.1bn; Abia, N198.3bn; and Anambra, N195.4bn.

With 13% Oil Derivation Fund of N534.9bn, 403.8bn, 256.2bn, 429.1bn and 351.8b totaling N1, 976tn in 2007, 2008, 2009, 2010 and 2011, respectively, allocated to the oil producing states to augment their income and specifically develop the states to improve living standards of the people, it is worrisome to have a UNDP survey in 2010 identifying Akwa Ibom with the third highest poverty rate of 27.1 per cent in the South-south zone after Cross River (31.9%) and Bayelsa (32.5%). According to the National Bureau of Statistic (NBS), as at 2010, Akwa Ibom State’s unemployment rate was the second highest in the zone with 25.8 per cent, while Delta State had the worst (27.2%).

Apart from the oil producing states, Lagos and Kano States fall within the highest recipients of allocation from the Federation Account with N436.3bn and 304.8bn, respective in the period under review. In 2013, a report by CISLAC revealed that no fewer than 1,025 deaths take place per 10,000 births in Kano State; and the State has achieved only 8% (of 15%) of Maputo Declaration on national budgetary allocation to health. Among the contributory factors to the high prevalence of maternal mortality in the State are high level of illiteracy, poor access to healthcare services and rising poverty level.

Similarly, on 28th October 2014, a report by Vanguard Newspaper exposed how health centres in Alimosho Local Government, a suburb of Lagos were adding half gallon of kerosene to the list of requirements expectant mothers must submit before delivery. According to the report, a visit to some other health centres revealed that in addition to the power problem, chronic shortage of medical personnel is another challenge, constituting factors bedeviling effective delivery of healthcare services. “The Local Government Area, home to about two million people and one of the largest local governments in Lagos State, can only boast of two PHCs. Worse still, Alimosho has one of highest maternal mortality rates in the state. A 2008 NDHS Report shows that it had about 900 deaths per 100,000 live births.”

As highlighted in the FASD Report, projects were reportedly poorly executed and monitored. The report cited an instance of Nassarawa State, where Farin Ruwa Dam, which cost about N1.4billion, was not executed. The only structure on the project site was a security and a sign post directing people to the site.

The FASD report advised the State governments to re-evaluate the revenue profile with an articulated and strategic plan to exploit the internal economic potential with intent to ensure equalization of their social and economic cost-benefit analysis. It has become imperative for states to embark on thorough review of their recurrent revenue, most especially overhead cost to avoid wasteful spending at the expense of capital development.


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