The Federal Government deducted N800bn from state allocations in 2024 to service foreign debts and other contractual obligations, according to the latest FAAC Quarterly Review released by the Nigeria Extractive Industries Transparency Initiative.
In a statement on Tuesday by the acting Director of Communication and Stakeholders Management, NEITI, Obiageli Onuorah, the agency noted that the report highlighted the financial strain on states due to debt repayments, despite record-high disbursements from the Federation Accounts Allocation Committee.
The statement revealed that total FAAC allocations reached N15.26tn in 2024, marking a 43 per cent increase from the previous year.
The surge was attributed to fiscal reforms, including the removal of fuel subsidies and exchange rate adjustments, which significantly boosted oil revenue remittances.
A breakdown of the disbursements showed that the Federal Government received N4.95tn, state governments got N5.81tn, and local governments were allocated N3.77tn.
The report noted that state governments recorded the highest percentage increase in allocations, rising by 62 per cent from N3.58tn in 2023 to N5.81tn in 2024.
Despite the higher allocations, states faced significant deductions, with N800bn removed at source for foreign debt servicing and other obligations.
