ANALYSIS OF FEDERAL ACCOUNT ALLOCATION COMMITTEE (FAAC) TO STATES IN THE SIX GEOPOLITICAL ZONES (2017-2023): ALLOCATIONS OF SUSTAINABLE DEVELOPMENT

Abstract

The federal government FAAC has been a major source of revenue to states and its impact on the states was considered for assessment.  This work conducted analysis of federal Accounts allocation committee (FAAC) to 36 states of the federation.  The study anchored on “Theory of Taxation). The study obtained data from National Bureau of Statistics covering 2017 to 2023. The study adopted the ex-post-facto research design. The questions were first answered with tables, frequency tables, percentages and bar charts while Error Correction Model within the framework of the Ordinary Least Square Multiple regression technique was implored for data analysis. Result revealed that the highest allocations were collected by Akwa Ibom, Bayelsa and Lagos states of South-South geopolitical zone as the higher producers of crude oil. The variables are all stationary after first differencing and that their statistical properties do not fluctuate with time as they remained constant over the entire period of 2017 to 2023. The foreign direct investment an foreign portfolio investment (FPI) both decreased federal allocations for the period reviewed but only federal customs Service expenditure decreased revenue generation significantly. This means that federal Customs service expenditure in Nigeria is very low compared to remittances and as such the country still suffers from low revenue generation. The study recommended that federal government should enhance her export base so as to increase earnings from exports which and every financial inflow into the Nigerian economy should be properly recorded by the Financial Intelligence Unit of the Central Bank of Nigeria.