SHOCKER: These 28 states cannot fund their 2019 budgets with two-year revenue
Data made available by the Nigeria Extractives Industries Transparency Initiative (NEITI) has shown that 28 states would be unable to fund their 2019 budgets from revenue realised in 2018 and 2017.
The information, which was made available in the NEITI quarterly review.
The eight states that would be able to fund their 2017 and 2018 revenue are Enugu, Kaduna, Delta, Yobe, Lagos, Kano, Nasarawa and Rivers.
TheCable reports that according to the data, only Yobe can fund its 2019 budget from the disbursements it received from the federation accounts allocations committee (FAAC).
A drop in oil prices also affected FAAC disbursements as the three tiers of government were unable to share N2 trillion in the first quarter of 2019 as was the trend since the second quarter of 2018.
“Oil prices experienced a downward spiral from November 2018. Oil prices were above $80 per barrel in October 2018 but by December 2018 they had dropped to $57 per barrel.
“Average oil price for the first quarter of 2019 was $63.17 per barrel. The average oil price for the year 2018 was $71.06 per barrel. Thus, oil prices have been considerably lower in the first three months of 2019 than they were in 2018,” NEITI said in its review.
NEITI described the budgets of states as being “largely too optimistic” adding that there are wide disparities in the net FAAC disbursements to states.
“This review showed that budgets for states are largely too optimistic. There is no state whose net FAAC disbursements in either 2017 or 2018 can adequately finance their budgets for 2019,” it said.
“This highlights the critical gap in the ability of FAAC disbursements to finance state budgets and brings into focus the importance of internally generated revenue (IGR). It also shows the inevitability of borrowing by states.”