2023 STATES’ ANNUAL REPORT FEDERATION ACCOUNT ALLOCATION COMMITTEE (FAAC)

Abstract

This publication marks a significant milestone with the release of the first Nigeria Governors' Forum Secretariat (NGFS) Federation Account Allocation Committee (FAAC) Annual Report 2023. Federation transfers from FAAC play a vital role in sub-national finances, serving as a key source of revenue for States alongside their Internally Generated Revenue (IGR) which contribute about 20% of their total recurrent revenues. For over a decade, the NGFS has participated in these FAAC meetings, in active support of the transparency and fair allocation of resources to finance State development projects. This inaugural report provides a comprehensive presentation of revenue allocation and disbursement from the Federation Account to the 36 States of the Federation in 2023. It also presents details of their debt obligations for the year and provides valuable insights into the projected revenue outlook for 2024. Key takeaways from the report based on the 2023 macro-fiscal performance include increased transfers to States by an additional N2 Trillion, particularly from Value Added Taxes and Foreign Exchange Gain, even as oil revenues were significantly impacted by production challenges. Key drivers of change in the year include the devalued Naira, Premium Motor Spirit (PMS) subsidy removal, inflation, and insecurity.