Nigeria’s state revenues have seen a significant surge, with total revenue almost doubling compared to the 2023 fiscal year. This increase is largely attributed to higher allocations from the Federation Accounts Allocation Committee (FAAC) and the removal of fuel subsidies, according to a report by the civic-tech organization, BudgIT Foundation.
Vahyala Kwaga, Deputy Country Director of BudgIT, noted that states are now earning substantially more, with Internally Generated Revenue (IGR) also showing considerable improvement across the board. “The total revenue of all states has almost doubled compared to the 2023 fiscal year, driven by increased revenue and transfers from FAAC, as well as the removal of subsidies,” Kwaga explained. The report highlights a ten-year performance review of Nigeria’s federating units, comparing year-on-year IGR growth and the 2023 and 2024 fiscal years.
The BudgIT report reveals that some states have made significant strides in improving their IGR, contributing to the growing fiscal independence of several states. Despite this progress, many states still rely heavily on FAAC allocations. The report’s findings are significant, as they provide insight into the fiscal performance of Nigeria’s states over the past decade.
The removal of fuel subsidies has had a notable impact on state revenues, allowing for increased allocations to states. Additionally, efforts to improve IGR have borne fruit, with many states enhancing their revenue collection capabilities. As Nigeria continues to navigate its economic landscape, the importance of diversifying revenue streams and reducing reliance on federal allocations cannot be overstated.
The BudgIT report’s findings are a testament to the progress made by Nigerian states in recent years. As the country moves forward, it is essential to build on this momentum, focusing on sustainable revenue growth and fiscal independence. By doing so, Nigeria’s states can better navigate economic challenges and work towards a more prosperous future. The report’s release provides a valuable opportunity for stakeholders to assess the current state of fiscal affairs in Nigeria and explore avenues for continued growth and development.
