Lagos, Akwa Ibom and Rivers are the only three of the 36 Nigerian states that can finance their recurrent expenditure independent of federal allocation, according to BudgiT.
Concise News reports that BudgiT, a civic organisation, revealed this in a report it released on Wednesday in Abuja, Nigeria’s capital.
The report, titled ‘State of States 2019’, showed that Nigerian states expended a whopping N4.319 trillion to fund their operations in the 2018 fiscal year, with recurrent spending gulping N2.67 trillion, while capital projects got N1.648 trillion.
BudgiT said the figures were derived from the states’ audited accounts and the National Bureau of Statistics (NBS) records.
It noted that most of the states failed to realise their revenue targets in 2018 due to grossly inadequate Internally-Generated Revenue (IGR).
As a result, 33 of the 36 states relied heavily on the Federation Account Allocation Committee (FAAC) takings, with Ondo emerging as the worst state in capital deployment, as only N8.9 billion was released for capital projects, whereas N89.4 billion was expended on recurrent.
Also, the report showed that Cross River state that budgeted N1.04 trillion spent N76.2 billion, consisting N38.7 billion for capital and N37.5 billion in recurrent cost.
But Lagos was the largest spender on capital projects with N309.3 billion, while spending N199.9 billion on recurrent.
Lead Researcher of BudgiT, Orji Uche, said only 19 states could meet their expenditure with IGR and federal allocation.
“The implication of looking at this index is to enable us to understand how many states can sustain themselves without federal allocation. And by sustaining themselves, we are looking only at recurrent expenditure,” Uche said.
“And by sustaining themselves, we are looking only at the recurrent expenditure. Are you going to meet your operating obligations, are you able to pay salaries so that anything coming from federal allocation would go to investments in the key sectors of the economy.
“When we look at the index, we can see that those states that can meet their expenditure only with IGR are only three States out of 36 States.
“What this means is that if they were to be oil price fluctuations and production allocation from the centre were to reduced, then many states would be in jeopardy.”