Inside Nigeria: Only two states can survive without FAAC Revenue — BudgIT

VAM News October 30, 2024 in National Tagged BudgIT, FAAC, Nigeria, two states - 2 Minutes

News Update

BudgIT, a civic tech organisation, has said that only Lagos and Rivers states can take care of their operating costs without relying on revenue from the Federation Account Allocation Committee.

BudgIT disclosed this in its 2024 State of States Report launched in Abuja on Tuesday.

The report stated that 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 costs.

This comes as the BudgIT’s report revealed that 34 states depend on FAAC receipts for 62 percent of their recurrent expenditures.

Additionally, the report noted that 32 states in Nigeria relied on FAAC receipts for at least 55 percent of their revenue, while 14 states relied on FAAC for 70 percent revenue.

“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 percent, respectively.

“Several other states, including Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo, managed to generate IGR sufficient to cover at least 50 percent of their operating costs, with the rest relying on federal transfers.

“32 states relied on FAAC receipts for at least 55 percent of their total revenue, while 14 states relied on FAAC receipts for at least 70 percent of their total revenue.

“Furthermore, transfers to states from the federation account comprised at least 62 percent of the recurrent revenue of 34 states, except Lagos and Ogun, while 21 states relied on federal transfers for at least 80 percent of their recurrent revenue,” the report stated.

The report added that in the 2023 fiscal year, the combined revenue of all 36 states in Nigeria increased significantly by 31.2 percent from N6.6 trillion in 2022 to N8.66t trillion.