A recent report by civic-tech group BudgIT reveals that 32 of Nigeria’s 36 states rely heavily on federal government allocations, with at least 55% of their revenue sourced from these funds. This dependence, as detailed in BudgIT’s 2024 State of States report, underscores the vulnerability of these states to shifts in federal revenue and oil prices.
“32 states relied on FAAC receipts for at least 55 percent of their total revenue,” BudgIT stated. “Meanwhile, 14 states relied on FAAC receipts for at least 70 percent of their total revenue.”
BudgIT also pointed out that, excluding Lagos and Ogun, federal transfers made up at least 62% of the recurrent revenue for 34 states. The statement added, “The picture painted above buttresses the over-reliance of the state governments on federally distributable revenue and accentuates their vulnerability to crude oil-induced shocks and other external shocks.”
Lagos State led all states in revenue, generating N1.24 trillion and accounting for 14.32% of the combined income of all states. In terms of expenditures, the report indicated that Lagos also topped the list, spending over N1.49 trillion, or 15.23% of the total.
BudgIT urged states to adopt measures for greater fiscal sustainability, advising them to boost internally generated revenue (IGR) and improve debt management practices.
