A recent review of budget performance across 29 Nigerian states has uncovered that a significant ₦1.994 trillion was directed toward recurrent expenses during the first nine months of 2024.
These expenditures covered items such as refreshments, travel, allowances, and utility bills.
According to the Punch, the analysis, derived from state budget reports between Q1 and Q3, highlighted a total borrowing of ₦533.29 billion by the states, while ₦658.93 billion was allocated to debt servicing.
Despite these expenditures, revenue generation fell short, with states collectively raising ₦1.92 trillion in internally generated revenue (IGR) against a target of ₦2.868 trillion, leaving a deficit of ₦948.28 billion.
This occurred even as states benefited from a 40% increase in statutory allocations due to policy changes, including the removal of fuel subsidies and a unified foreign exchange market.
According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the Federation Accounts Allocation Committee (FAAC) distributed ₦3.473 trillion to federal, state, and local governments in Q2 2024—a 1.42% increase from Q1.
Nevertheless, improved allocations did not translate into fiscal balance. The federal government received ₦1.102 trillion (33.35%), states received ₦1.337 trillion (40.47%), and local governments shared ₦864.98 billion (26.18%).
While states experienced a 4.29% increase in their allocation compared to the previous quarter, citizens have yet to see improvements in their standard of living.
Among the states, Lagos recorded the highest recurrent expenditure at ₦375.19 billion, followed by Plateau with ₦144.87 billion and Delta with ₦121.54 billion. Ondo and Bauchi followed with ₦107.34 billion and ₦99.31 billion, respectively.
Niger State was the top borrower, securing ₦79.09 billion in loans, trailed by Katsina with ₦72.89 billion and Oyo with ₦62.48 billion.
Revenue generation varied widely. Lagos led with ₦912.17 billion, followed by Rivers at ₦269.18 billion, and Delta with ₦97.02 billion. However, many states faced significant shortfalls.
For instance, Abia generated ₦22.15 billion against a target of ₦32.14 billion, while allocating ₦17.91 billion to recurrent spending and ₦10.91 billion to debt servicing. Adamawa spent ₦41.45 billion on recurrent costs while generating just ₦9.16 billion in revenue.
Several states also accumulated considerable debts. Bauchi borrowed ₦33.64 billion, Bayelsa secured ₦57.85 billion but overshot its revenue target by spending ₦75.23 billion on recurrent costs.
Similarly, Ekiti borrowed ₦11.75 billion while spending ₦74.73 billion on recurring expenses, far exceeding its revenue of ₦23.16 billion.
In contrast, some states managed to avoid borrowing. Akwa Ibom, for example, spent ₦85.45 billion on recurrent costs, despite generating only ₦41.47 billion in revenue, while Delta allocated ₦121.54 billion to operating expenses, earning ₦97.02 billion but avoiding loans.
The financial strain was evident across other states as well. Plateau, for example, spent ₦144.86 billion on operating costs while generating just ₦18.03 billion in revenue.
Similarly, Taraba’s recurrent expenditure of ₦58.39 billion dwarfed its revenue of ₦7.84 billion, forcing the state to borrow ₦52.63 billion.
Overall, the report paints a concerning picture of fiscal mismanagement, highlighting an over-reliance on loans and statutory allocations to fund expenditures, with little focus on improving internally generated revenue.
