• Tuesday, May 28, 2024
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Despite rising FAAC allocations, poverty spreads in states

Despite rising FAAC allocations, poverty spreads in states

The Federation Account Allocation Committee (FAAC) increased its allocation to states by 30.5 percent to N3.16 trillion in 2022, data show, even as poverty continued to spread across the country.

The bulk of the revenue shared at FAAC meetings by the federal, state, and local governments are earnings from oil exports, taxes, and other statutory allocations.

Data from the National Bureau of Statistics (NBS) showed that in 2022, states received an allocation of N3.16 trillion, up from N2.42 trillion in 2021 and N2.23 trillion in 2020.

“We have more poor people now than at any other time despite rising FAAC allocations, poor Nigerians are the majority, from big cities to rural neighbourhoods,” Luqman Agboola, head of research at Sofidam Capital, said. “The state governments have been irresponsible in project and programme initiation and execution as there is often no linkage to the human development index.”

Further breakdown of the NBS data showed Delta got N370 billion; Akwa Ibom, N293 billion; Rivers, N283 billion; Bayelsa, N250 billion; and Lagos, N225 billion, making them the states with the highest revenue allocations from the federal government in 2022.

Other states include Kano (N113 billion), Edo (N104 billion), Oyo (N96 billion), Ondo (N91 billion), Imo (N89 billion), Kaduna (N88 billion), Kastina (N83 billion), Borno (N80 billion), Bauchi (N79 billion), Niger (N77 billion), Jigawa (N75 billion), Anambra (N75 billion), Benue (N74 billion), and Sokoto (N73 billion).

The others are Kogi (N72 billion), Abia (N70 billion), Plateau (N69 billion), Kebbi (N69 billion), Enugu (N68 billion), Adamawa (N67 billion), Zamfara (N66 billion), Ogun (N66 billion), Crossriver (N66 billion), Yobe (N64 billion), Gombe (N63 billion), Taraba (N63 billion), Ogun (N63 billion), Ekiti (N61 billion), Ebony (N61 billion), Kwara (N61 billion), and Nassarawa (N60 billion).

“States’ increasing reliance on federal allocation for income rather than economic activities like agriculture and industrialisation, which will spur rural development, contributes to escalating poverty,” Henry Ogbuaku, head, asset management at Growth and Development Asset Management Ltd, said.

“Their priorities are often not right and should ordinarily be tailored to address the root causes of poverty; this is the sad reality of our current condition in Nigeria,” he added.

At least 133 million people are suffering from “multi-dimensional poverty”, according to a report by the NBS released last year, which says citizens spent about half of their income on food and another 20 percent on transportation.

The report says Sokoto, Bayelsa, Jigawa, Kebbi, and Gombe states have been ranked as the poorest states in Nigeria, based on the Multidimensional Poverty Index (MPI) report.

NBS says the indicators, which showed the above states are the poorest states, include nutrition, food insecurity, time to healthcare, school attendance, years of schooling, school lag, water, water reliability, sanitation, housing materials, cooking fuel, assets, unemployment, underemployment, and security shock.

The report says: “In a federal system, it is vital to understand the level of poverty by state. Poverty levels across states vary significantly, with the proportion of the population (incidence) living in multidimensional poverty ranging from a low of 27 percent in Ondo to a high of 91 percent in Sokoto.

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“It will be more expensive to reduce poverty in Zamfara, where the intensity of poverty is higher, at 42 percent, than in Lagos (34 percent), because each poor person in Zamfara, on average, faces more deprivations at the same time.”

According to the report, Bayelsa is distinct from the other poorer states in having the largest contribution across all states in unemployment and shocks.

“Even when comparing Kebbi and Jigawa, which are somewhat more similar, we see a much greater challenge in access to water and greater nutritional deprivations in Kebbi, as well as school lag and underemployment in Jigawa,” it added.

“No country can develop where a large part of its earnings is spent on administrative structures rather than on capital investment,” Ogbuaku said.

A report by BudgIT, a civic organisation driven to make the Nigerian budget and public data more understandable and accessible, said: “State governments’ recurrent costs have increased significantly over the years with only a small portion of collected revenue and loans dedicated to meet capital.”

“This spending pattern is not sustainable as this has opened gaps in providing quality healthcare services and educational systems, thus slowing down social development as well as growth in other key areas of the economy,” BudgIT said in its report titled “Patterns in States’ Expenditure”.