The federal government seem to be building on Rivers state governor, Nyesom Wike’s claim that the monies he used in building multiple flyovers and other infrastructure in the state came from backlog of 13% Derivation Fund paid by the federal government.
A recent report released by the Debt Management Office [DMO] shows that outside Lagos and Kaduna, Nigeria’s oil-producing states are mostly the country’s biggest debtors.
The DMO report say that whereas the oil producing states received the biggest allocations, the total debts of the states in question increased from N2.04 trillion in December 2015 to N3.35 trillion as of the middle of 2022.
The figure indicates a total of N1.311 trillion in borrowings by the states in seven years. The top 10 states are Akwa Ibom, Delta, Edo, Abia, Ondo, Imo, Cross River, Bayelsa and Lagos.
The report showed that the states received about N6.4 trillion in federal allocation and 13 per cent derivation fund. The minister of finance, budget and national planning, Zainab Ahmed, said the Nigerian government paid out a total of N1.98 trillion as a share of the 13% derivation fund to oil-producing states under President Muhammadu Buhari.
Ahmed stated that the federal government gave the amount in the last years of Buhari’s administration.
As per the minister, one of the critical roles of her ministry is in support of the states, stating that Buhari understands that the country’s economy would not survive without the oil-producing states.
In an outburst that has become popular, governor Wike had disclosed that most other oil-producing states had refused to disclose their earnings from the federal government with regards to the Derivation Fund refunds to all the Niger Delta states from 1999 to date.
The finance minister further said that the Nigerian government had supported states in Nigeria with N5.03 trillion and an additional $3.4 billion since 2015.
She said the states got N445 billion as a salary bailout except for Akwa Ibom, Anambra, Jigawa, Lagos and Yobe in September 2015. Other states received N340 billion as an excess crude loan apart from Lagos and Osun.
Additionally, all the states received N160 billion as budget facility support aside from Lagos. The states also received $2.67 trillion as a Paris Club refund; N750 million was paid in 2021 as an SFTAS reward, and N600 billion was paid as withdrawal from subsidy payment in April this year.
The National Bureau of Statistics said the oil-producing states received about N4.46 trillion from the Federal Account Allocation Committee (FAAC) between 2016 and 2020 as payment for 13% derivation. The amount later increased to N6.4 trillion.
The minister said Delta State received the highest allocation of N804.27 billion in the same period under review, and Cross River got N147.86 billion, the least so far. Akwa Ibom – N769.19 billion Lagos, N523.63 billion Rivers – N675 billion Edo – N255,32 billion Abia – N225.47 billion Ondo – N250.86 billion Imo – N234.37 billion and Bayelsa – N575.39 billion.
On the other hand, the NBS stats said FAAC receives oil revenues, taxes and revenues from Nigerian Customs, company income tax, and sales of national assets, including surplus and dividends from state-owned enterprises.
The sub-national debt report of DMO said that the total indebtedness of the oil-producing states increased from N2.04 trillion in December 2015 to N3.35 trillion as of June 2022.
An additional breakdown indicates that in 2015, a total of N1.22 trillion came from domestic creditors, while external creditors contributed $1.84 billion.
Lagos leads in total debt with N797.31 billion as of June 2022, followed by Delta State with N378 billion. In external debt, Lagos leads with $1.27 billion, followed by Edo with $268.31 million. Cross River follows with N$215.75 million in the period under review.
By Bosco Anayo