States N1.08 trn allocation in 10 months covers only 41% of recurrent expenses

Nigeria’s 36 states have shared N1.08 trillion in the first 10 months of 2016, but that money can only cover 41 percent of their salaries and other overhead obligations.

This means that states with low internally generated revenues will continue to struggle to pay the salaries of their workers, while expenses on capital projects, especially on infrastructure, education and health sector will continue to suffer.

Data obtained by BusinessDay from BudgetIT, a public organisation that advocates transparency and accountability in government, shows that the 36 states shared N1.08 trillion among themselves from January 2016 to October 2016.

However, the total salaries and overheads liabilities for the same period, stood at N2.63 trillion, N1.58 trillion more than the revenues that the states got from the Federation Account within the same period.

Lagos State, Nigeria’s commercial capital, had the largest shortfall of N217 billion among the 36 states in the country but it has little to worry about because its internally generated revenue of N278 billion per annum is able to cover its shortfall.

Delta State has the next highest shortfall of N98 billion, having received federation revenue of N55.45 billion but with a salaries and overheads burden of   N153.24 billion. The state’s internally generated revenue is only about N40 billion a year, not enough to cover the deficit from the Federation Account.

Akwa Ibom State ranks third, with a revenue shortfall of N93 billion and an internally generated revenue of N14.8 billion.  Bayelsa State has a revenue shortfall of N90 billion and internally generated revenue of N8.7 billion per annum, while Ogun State has a revenue shortfall of N83 billion and estimated internally generated revenue of N34.59 billion.

The poor revenue position of the states is what has resulted in at least 27 states across the federation struggling to pay workers salaries. Analysts say this situation would not change unless states are able to boost internally generated revenues.

In October, the federal, states and local governments shared only N455.13 billion , which was about N55 billion less than the N510.27 billion shared in September 2016.

Data from the National Bureau of Statistics (NBS), shows the top five states got a N34 billion, representing 30 per cent of FAAC revenue shared by all states.

Akwa Ibom got the highest allocation of N8.72 billion in October, while Rivers with N7.62 billion, had the second highest allocation. Bayelsa State, Lagos State, and Delta State received N6.36 billion, N5.98 billion and N5.64 billion respectively, to complete the list of the top recipient states.

On the other hand, five states with the lowest FAAC revenue receipts shared N6.68 billion (6 per cent) of the October FAAC revenues.

Osun State received the lowest net FAAC allocation of N305 million, having seen N2.4 billion deducted from its gross allocation in respect of its debt obligations.

Cross River State, with net allocation of N1.44 billion was the state with the next lowest net FAAC revenue receipts, while Ogun ranked third in terms of lowest revenue received, with N1.6 billion net receipts for the month.

Innocent Unah