Oil-producing states share N135bn derivation fund in three months

Dublin, Ireland – Nigeria’s oilproducing states shared N134.62 billion from the federation account under the 13 per cent derivation principle, in the third quarter of 2022, according to reports by the Central Bank of Nigeria, CBN.

The CBN, in its third quarter 2022 economic report, disclosed that this was 0.50 per cent lower than the N135.30 billion shared by the states in the second quarter of 2022; while it was 2.87 per cent higher than the N130.87 billion 13 per cent derivation allocated to the states in the third quarter of 2021.

The bank noted that gross federation revenue in the third quarter of 2022 stood at N3.675 trillion, rising by 14.71 per cent and 28.31 per cent compared with gross federation revenue of N3.204 trillion and N2.864 trillion, recorded in the second quarter of 2022 and third quarter of 2021, respectively.

The CBN noted that while gross federation revenue in third quarter 2022 exceeded the level in second quarter 2022 by 14.7 per cent, it fell below the benchmark of N4.598 trillion by 20.1 per cent.

It attributed the improvement in revenue, compared with the previous quarter, to the significant jump in receipt from company income tax, adding that in terms of contribution to total federation revenue, non-oil revenue maintained its dominance, at 66.5 per cent, while oil receipt accounted for the balance of 33.5 per cent.

From the total federation earnings, the CBN stated that: “A net distributable balance of N2.429 trillion was disbursed to the three tiers of government, after accounting for statutory deductions and transfers, as well as additional

revenue from excess crude.

“Of this amount, the Federal Government got N988.10 billion, while state and local governments received N749.72 billion and N557.19 billion, respectively. The balance of N134.62 billion was distributed to oil-producing states as 13.0 per cent Derivation Fund. Although total disbursement to the federating units was 18.9 per cent higher than the sharing in the preceding quarter, it was 32.5 per cent below projection,” it said.

The bank reported that oil earnings declined by 4.91 per cent to N1.233 trillion in the third quarter of 2022, compared with the previous quarter’s oil earnings of N1.296 trillion; while it was 7.86 per cent higher than the N1.143 trillion oil revenue recorded in the third quarter of 2021.

It noted that Nigeria’s average crude oil production and export declined by 10.9 per cent and 16.9 per cent to 1.14 million barrels per day, mbpd, and 0.69 mbpd in the third quarter 2022, from 1.28 mbpd and 0.83 mbpd, respectively, in the preceding quarter, adding that Nigeria’s production fell short of its Organization of the Petroleum Exporting Countries, OPEC, quota of 1.81 mbpd, by 668,000 barrels per day, bpd, in the third quarter 2022.