Nigeria’s 36 states received a total of N1.51 trillion ($3.7 billion) from the federal government as their share of the crude oil revenue in the first half of 2023, according to a report by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The report, which analyzed the second quarter of 2023 Federation Account Statutory Revenue Allocations, revealed that the states spent most of the money on debt servicing, recurrent expenditure, and subsidies, leaving little for capital projects and development.

The report also showed that the states’ allocation declined by 12 percent from N817.8 billion in the first quarter to N688.2 billion in the second quarter due to lower oil prices and production.

According to NEITI, only nine states – Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers – received additional allocations as their share of the 13 percent derivation revenue for being oil-producing states. The total amount they received was N869.09 billion.

However, the report noted that most of these states should have used the funds for the development of their oil-rich communities, which have suffered from environmental degradation, poverty, and insecurity.

The report also highlighted the huge debt burden of some states, which affected their net allocations after deductions. It said that Lagos state topped the list with N9 billion deducted from its allocation in the second quarter, followed by Delta (N6.76 billion), Ogun (N6.10billion), Kaduna (N5.63billion) and Osun (N5.6billion).

The report said that Plateau, Ogun, and Osun were the states whose revenue receipts were negatively impacted by the debt deductions, as they dropped in their ranking among the 36 states.

NEITI urged the states to improve their fiscal management and transparency and diversify their revenue sources beyond oil dependence.

The report is part of NEITI’s mandate to promote accountability and good governance in Nigeria’s extractive sector. NEITI is an independent agency that implements Nigeria’s global standard of Extractive Industries Transparency Initiative (EITI).

Source: Tribune