A comprehensive review of the fiscal activities of 29 Nigerian states during the first nine months of 2024 has unveiled significant borrowing, subpar revenue generation, and rising recurrent expenditures.
Despite earning N1.92 trillion as Internally Generated Revenue (IGR), the states fell short of their revenue target by N948.28 billion. Meanwhile, they borrowed N533.29 billion and spent N658.93 billion servicing debts owed to local, foreign, and multilateral creditors.
The governors allocated N1.994 trillion to recurrent expenditures, which covered items such as refreshments, travel expenses, utilities, and sitting allowances.
These expenditures notably excluded personnel costs. States such as Lagos, Plateau, and Delta recorded the highest operating expenses, spending N375.19 billion, N144.87 billion, and N121.54 billion, respectively.
Revenue performance varied across the states, with Lagos leading the pack by generating N912.17 billion. Rivers followed with N269.18 billion, while Delta ranked third with N97.02 billion.
However, many states struggled with significant deficits. For instance, Plateau, Taraba, and Yobe recorded revenue far below their recurrent expenditures, with Taraba incurring a N50.55 billion shortfall.
Borrowing also surged, with Niger State leading as the highest borrower, securing N79.09 billion in loans. Katsina and Oyo followed, obtaining N72.89 billion and N62.48 billion, respectively.
Despite the influx of funds from loans and increased federal allocations, much of the states’ budgets were spent on operational costs rather than developmental projects that could boost the economy.
Experts have criticized the lack of fiscal discipline and transparency. Professor Segun Ajibola, a former president of the Chartered Institute of Bankers, attributed the growing costs of governance to weak oversight by state assemblies, which he said have largely abandoned their responsibilities.
He expressed concern over the minimal economic impact of these expenditures on grassroots citizens, calling for stricter accountability measures.
The Fiscal Responsibility Commission recently expressed its unease over the country’s fiscal federalism structure, warning that the current model might become unsustainable without urgent reforms.
The commission emphasized the need for states to adopt more disciplined financial practices and prioritize spending that delivers tangible economic benefits.
As 2024 draws to a close, the widening revenue deficits and escalating debt burdens underscore the urgency for states to re-evaluate their fiscal strategies.
Strengthening accountability and reducing wasteful spending remain critical to ensuring long-term financial sustainability and improving living standards for citizens.