BudgIT, however, added that 6 states can generate IGR sufficient to cover at least 50 per cent of their operating costs
By Kehinde Okeowo
A civic tech organisation, BudgIT has disclosed that 34 out of the 36 states in Nigeria would have gone bankrupt without revenue from the Federation Account Allocation Committee (FAAC).
It made this known via its 2024 State of States Report launched in Abuja, the nation’s capital on Tuesday
According to the report, only Lagos and Rivers states can take care of their operating costs without relying on FAAC revenue.
BudgIT, however, added that Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo states can generate Internally Generated Revenue, (IGR) sufficient to cover at least 50 per cent of their operating costs.
It went on to state that 34 states depend on FAAC receipts for 62 per cent of their recurrent expenditures.
Additionally, the report noted that 32 states in Nigeria relied on FAAC receipts for at least 55 per cent of their revenue, while 14 states relied on FAAC for 70 percent revenue.
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“Rivers and Lagos were the only two states that generated more than enough internally generated revenue (IGR) to cover their operating expenses, with lGR to operating expense ratios of 121.26 percent and 118.39 per cent, respectively.
“Several other states, including Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo, managed to generate IGR sufficient to cover at least 50 per cent of their operating costs, with the rest relying on federal transfers.
“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 report stated.
The report further noted that in the 2023 fiscal year, the combined revenue of all 36 states in Nigeria increased significantly by 31.2 per cent from N6.6 trillion in 2022 to N8.66t trillion.