A civil society organization focused on public finance transparency, BudgIT, has reported that only Lagos and Rivers states can independently cover their operating costs without relying on revenue from the Federation Account Allocation Committee (FAAC).
This finding was published in BudgIT’s 2024 State of States Report, launched in Abuja on Tuesday.
According to the report, Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo states can generate Internally Generated Revenue (IGR) sufficient to cover at least 50 percent of their operating expenses.
The report further highlighted that 34 states depend on FAAC receipts for 62 percent of their recurrent expenditures. In addition, it revealed that 32 states rely on FAAC receipts for a minimum of 55 percent of their revenue, while 14 states depend on it for at least 70 percent.
“Rivers and Lagos are the only two states that generate sufficient IGR to fully cover their operating expenses, with ratios of 121.26 percent and 118.39 percent, respectively.”
“Several other states, including Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo, have generated enough IGR to cover at least 50 percent of their operational costs, with the remainder relying on federal transfers.”
“Furthermore, 32 states rely on FAAC receipts for at least 55 percent of their total revenue, while 14 states depend on it for at least 70 percent of their total revenue. Notably, transfers from the federation account comprise at least 62 percent of the recurrent revenue for 34 states, excluding Lagos and Ogun. Moreover, 21 states rely on federal transfers for at least 80 percent of their recurrent revenue,” the report stated.
The report concluded that in the 2023 fiscal year, the combined revenue of all 36 states in Nigeria saw a significant increase of 31.2 percent, rising from N6.6 trillion in 2022 to N8.66 trillion.
