A recent review of the budget reports from Nigerian state governments for the year 2024 has shown some concerning financial trends. In total, 30 state governors managed to raise about 2.8 trillion Naira (N) from their own revenue sources, known as Internally Generated Revenue (IGR). However, they spent even more—approximately 3.03 trillion Naira—on various operational costs.
This spending included expenses for things like refreshments, allowances for meetings, travel (both local and international), utility bills, and medical costs. Such high spending has raised eyebrows and sparked debates about how state governments are managing their finances, especially given the low amounts of revenue they are generating.
To put things into perspective, while these states aimed to collect 2.836 trillion Naira in revenue, they fell short by 24 billion Naira. This means that, overall, they spent 223 billion Naira more than they earned.
Additionally, the states had to pay back a total of 1.038 trillion Naira in debts owed to various creditors, including local, foreign, and international lenders. Interestingly, state governments have been benefiting from increased funds due to the removal of fuel subsidies and the devaluation of the Naira, which has allowed them to collect more money from the federal government.
In the past year, the federal government allocated a total of 15.12 trillion Naira to all levels of government, which is a significant increase of nearly 50% compared to the previous year. Of this amount, state governments received about 5.22 trillion Naira, making up 34.5% of the total allocation. Local governments received nearly 5 trillion Naira, while the central government got about 4.95 trillion Naira.
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When looking at the monthly distributions of these funds, states received varying amounts throughout the year. For example, they received 396.69 billion Naira in January and saw increases in allocations over the months, culminating in a December allocation of 549.79 billion Naira.
However, there is a looming concern that the direct allocation of funds to local governments could affect the amount of money states currently receive. State governments are worried that this could reduce their share of national revenue by nearly a third, which would impact their financial stability and ongoing projects.
Despite the influx of cash, state governments have been criticized for spending heavily on non-essential activities rather than focusing on productive investments that could benefit their citizens. There is a growing call for stricter financial discipline to ensure that public funds are used wisely.
An analysis of the budget performance across 30 states revealed that while some states like Rivers, Lagos, and Ekiti exceeded their revenue targets, many others struggled. For instance, 19 states met between 53% and 99% of their revenue targets, while three states—Taraba, Niger, and Jigawa—fell below 50%.
In terms of spending, Lagos State was the highest spender, using 578.74 billion Naira, while generating 1.16 trillion Naira in revenue. Other states, such as Akwa Ibom and Bauchi, showed significant discrepancies between their revenue and spending, leading to increased borrowing to cover deficits.
In total, across the 30 states, approximately 147.8 billion Naira was spent on refreshments, welfare packages, and allowances for government guests over the year. This spending has raised concerns about priorities, as it diverts funds from essential services that could improve the everyday lives of citizens.
Experts have pointed out that such lavish spending not only undermines public trust in government but also detracts from the focus on building a robust economy. They argue that state governments need to innovate financially and develop unique strengths to attract investments.
Overall, the persistent issue of high operational costs and inadequate accountability at the state level continues to hinder economic growth and development, leaving ordinary citizens feeling the pinch of government decisions that do not prioritize their well-being.
