The Federal Accounts Allocation Committee (FAAC) allocation to the federal government, 36 states, and 774 LGAs increased by N5trillion from June 2023 to April 2024 compared to the corresponding period under former President Muhammadu Buhari, LEADERSHIP Data Miners report.
Findings revealed that the increase was against the backdrop of subsidy removal and liberalization of the foreign exchange market. Checks by LEADERSHIP from the monthly FAAC allocations from June 2023 till April 2024, showed that the federal government, 36 states, and the 774 LGAs received a total of N16.82 trillion while in the corresponding period of 2022 June to April 2033, the three tiers of government received a total of N11.73 trillion.
Further breakdown revealed that the federal government received a total of N4.11 trillion in 11 months of June 2023 to April 2024, N740 billion higher than the N3.37 trillion it received in the corresponding period of June 2022 to April 2023.
Similarly, the 36 states received a total of N3.8 trillion in the 11 months of June 2023 to April 2024 while in the corresponding period of 2022 to 2023, the states got N2.753 trillion. The 774 LGAs received a total of N2.7 trillion between June 2023 and April 2024 and received N2.035 trillion in the corresponding period under President Muhammadu Buhari’s regime.
Also, LEADERSHIP Data Miners’ checks revealed that the federal government got its highest share of FAAC allocation in September 2023 when it received a total of N431.25 billion and received its lowest allocation of N320.54 billion in the next month of October 2023. Previously under the last regime, the federal government received its highest allocation of N406.61 billion in the period under review in August 2022 and its lowest in June 2022 (N229.56 billion).
Analysts are worried that in most states in Nigeria, revenue increases do not correspond with budgetary allocations for capital projects. A report released by BudgIT, a civic organisation dedicated to enhancing the accessibility and comprehension of the Nigerian budget and public data, highlighted trends in state government expenditure. According to the report titled ‘Patterns in States’ Expenditure,’ there has been a significant rise in recurrent costs among state governments over the years, with only a fraction of the revenue and loans being allocated towards capital investments.
This spending trend, as noted by BudgIT, is unsustainable and has resulted in inadequacies in delivering quality healthcare and education services, thereby impeding social development and economic growth in various sectors.
The report further reveals that a considerable portion of the total revenue of 33 states comprises federal transfers, with 13 states heavily reliant on these transfers for the majority of their revenue.
Also, analysts emphasize the necessity for state governors to prioritise infrastructural development and essential services over lavish spending. They advocate for prudent financial management, expansion of revenue bases, leaner governance structures, and enhanced accountability in public expenditure.
According to public finance, Emeka Uwajeh, there is a need for transparency and citizen engagement in public spending decisions to ensure funds are allocated effectively and for the benefit of the populace.
Commenting, Prof. Bongo Adi of the Lagos Business School, noted that the Nigerian economy has not improved in recent times and there has been no infrastructure development to show for the revenue being generated by the government. “Our quality of life has declined considerably. While we attribute it to macro-economic issues such as inflation and all whatnot, but also the quality of governance has also not improved in anyway. If we look at all these, one may question the use of those monies.”
