*Says Only Lagos, Rivers Generate Enough Internal Revenue For Operating Costs.
* States like Akwa Ibom, Bayelsa, Taraba Need More Than Five Times IGR For Basic Expenses
A new report, released by BudgIT, civic-tech group says 32 of Nigeria’s 36 states depended heavily on funds distributed monthly by the federal government last year for their survival, warning that the precarious situation puts them at risk, particularly as the country relies heavily on revenue from oil, which are subject to changes in the international markets.
BudgIT, which shared these findings in their 2024 State of States report, released Tuesday in Abuja noted that the situation is so serious that at least 55% of their total income were gotten from these allocations.
Painting a gloomy picture of the states’ vulnerability to external shocks in the event of shift in federal allocations, the statement from the report launch stated, “32 states relied on FAAC receipts for at least 55 per cent of their total revenue, while 14 states relied on FAAC receipts for at least 70 per cent of their total revenue.”
“Furthermore, transfers to states from the federation account comprised at least 62 per cent of the recurrent revenue of 34 states, except Lagos and Ogun, while 21 states relied on federal transfers for at least 80 per cent of their recurrent revenue. The picture painted above buttresses the over-reliance of the state governments on federally distributable revenue and accentuates their vulnerability to crude oil-induced shocks and other external shocks.”
BudgIT reported that total revenue across all 36 states increased by 31.2%, rising from N6.6 trillion in 2022 to N8.66 trillion in 2023.
The, boost, according to the report came mainly from increased federal allocations after the government ended petrol subsidies, freeing up more money to share with states.
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Lagos State led all states in revenue, generating N1.24 trillion, which represents 14.32% of all states’ combined income.
The report found that only Lagos and Rivers states generated enough internal revenue to cover their operating costs. In contrast, states like Akwa Ibom, Bayelsa, and Taraba needed more than five times their internally generated revenue to meet basic expenses, making them heavily dependent on federal support and outside help.
Some analysts say the development may have put to question the extravagant spending patterns of some states, while also berating some for littering their states with uncompleted undesirable projects, through which the resources are misapplied.
They challenge the governors to devise innovative ways of increasing the IGR, while calling for prudence as well as accountable and responsible leadership.
