Nigerian oil-producing states receive N424 billion in 2020 as 13% oil derivatives

A sum of N424.02 billion was shared among eight oil-producing states in Nigeria in the year 2020 as part of 13% oil derivatives

By Samuel Oyekanmi

A sum of N424.02 billion was shared among eight oil-producing states in Nigeria in the year 2020 as part of 13% oil derivatives. 

This is according to data obtained from the Federal Account Allocation Committee (FAAC) reports published regularly by the National Bureau of Statistics (NBS)

A cursory look at the data tracked by Nairalytics – the research arm of Nairametrics, shows that the amount shared in 2020 reduced by 20.9% when compared to the total of N536.35 billion shared in the previous year. 

The reduction in the funds shared, can be attributed to the crash in oil prices triggered by disruptions caused by the Covid-19 pandemic and the oil price war between Saudi Arabia and Russia.

Breakdown 

Specifically, Nigerian Oil producing states that received funds in 2020 include Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, and Abia. It is worth noting that Lagos State is also an oil-producing state, but did not receive any fund in the year under review. 

• On the list, Delta State ranks first, with a total of N130.6 billion, which represents about 31% of the total 13% derivation shared in 2020. 
• Akwa Ibom closely followed having received a total of N94.8 billion as 13% derivation revenue shared. This means the state received 22% of the total disbursement during the period. 
• Others on the list include; Bayelsa (N80.9 billion), Rivers (N78.4 billion), Edo (N13.6 billion), Ondo (N11.3 billion), Imo (N9.1 billion), and Abia State (N5.3 billion).

Debt concerns 

Despite the 13% derivation received, most of the 9 states (if not all) are among the most highly indebted states in Nigeria. For example, Lagos State leads in the domestic debtors’ list with a total domestic debt of N493.3 billion as of Q3 2020. 

• Rivers State follows with a domestic debt stock of N266.9 billion, representing the second state with the highest domestic debt stock. 
• Akwa Ibom and Delta both recorded domestic debt stock of N239.2 billion and N235.9 billion respectively. 
• Imo State and Bayelsa are also among the list of top 10 states with the highest domestic debt stock with N158.2 billion and N147.9 billion respectively. 
• In terms of external debts, Lagos State also leads the pack with a debt stock of $1.26 billion. 

Although none of the other oil-producing states fall into the top ten list in terms of external debts, their debt portfolio is still a cause for worry considering their capacity to generate revenue internally. 

Amongst the oil-producing states, only Lagos appears to have the ability for self-sustenance with total available revenue of N254.5 billion as of the first half of 2020 with IGR accounting for 80.34% of the total. 

Data from the NBS, shows that the proportion of internally generated revenue in comparison to total revenue for the other oil-producing states is well below average, indicating that most of the states are FAAC dependent states.