See the List of 29 Nigerian States that Spend N2tn on Travel, Refreshments, and Other Recurrent Costs — Report
State Governments Borrow N533bn, Generate N1.92tn in IGR, and Spend N658bn on Debt Servicing
A recent report has revealed that 29 state governments in Nigeria spent a total of N1.994 trillion on recurrent expenditures, which include travel, refreshments, sitting allowances, and utilities, during the first nine months of 2024. The findings also indicate that these states borrowed N533.29 billion and spent N658.93 billion servicing debts owed to domestic, foreign, and multilateral creditors.
Despite receiving improved statutory allocations from the Federation Account, the states fell short of their internal revenue generation targets, raising only N1.92 trillion against a projected N2.868 trillion, resulting in a revenue shortfall of N948.28 billion. Notably, the data does not account for personnel costs, which would likely increase the total expenditure.
An analysis of fiscal performance from Q1 to Q3 of 2024 shows a need for urgent fiscal discipline, especially as public calls for reduced governance costs grow louder. This comes amid a 40% increase in state allocations from the Federation Account, driven largely by the removal of fuel subsidies and the unification of the foreign exchange market.
Between January and September 2024, the Federation Accounts Allocation Committee (FAAC) disbursed N3.473 trillion to federal, state, and local governments. Of this, the federal government received N1.102 trillion (33.35%), while states got N1.337 trillion (40.47%), and local councils received N864.98 billion (26.18%).
However, this increased allocation has yet to translate into better living standards for citizens, as recurrent expenditures, such as travel and utilities, continue to dominate state budgets. Lagos, Plateau, and Delta states incurred the highest operating expenses, with N375.19 billion, N144.87 billion, and N121.54 billion spent, respectively. Other states like Ondo and Bauchi followed with N107.34 billion and N99.31 billion in recurrent spending.
In terms of loans, Niger State, under Governor Mohammed Umar Bago, emerged as the highest borrower, taking out N79.09 billion in loans. Katsina and Oyo states followed with loans of N72.89 billion and N62.48 billion, respectively.
Revenue generation varied widely across the states, with Lagos leading by generating N912.17 billion, followed by Rivers with N269.18 billion, and Delta with N97.02 billion. On the other hand, several states, such as Abia, Adamawa, and Ebonyi, faced significant revenue shortfalls, failing to meet their targets despite substantial recurrent spending.
Some states also faced mounting debt obligations. For example, Bauchi borrowed N33.64 billion and spent N27.54 billion on debt service, while Edo and Kebbi borrowed N12.84 billion and N24.59 billion, respectively, with significant amounts allocated to debt servicing.
Experts are raising concerns over the increasing costs of governance at the state level. Professor Segun Ajibola, an economist at Babcock University, highlighted that the persistent issue of high governance costs, combined with a lack of accountability, has resulted in minimal economic benefits for local populations. Ajibola also pointed out the failure of state assemblies to hold governors accountable, allowing for a lack of transparency in financial management.
The Fiscal Responsibility Commission has also expressed concern about Nigeria’s current fiscal structure, warning that the present system may not be sustainable in the long run.
