29 state governors spend N2tn on travel, allowances, other expenses – Report

A total of 29 state governors spent N1.994 trillion on recurrent expenditures in the first nine months of 2024, covering items like refreshments, sitting allowances, travel expenses, and utility bills, according to findings from The PUNCH.

Additionally, these states borrowed N533.29 billion and spent N658.93 billion servicing debts owed to local, foreign, and multilateral creditors. However, they fell short of their revenue-generating targets, raising only N1.92 trillion in internally generated revenue, falling short of the N2.868 trillion goal by N948.28 billion.

Notably, the recurrent expenditure data excludes personnel costs.

A review of each state’s fiscal performance, using budget implementation data from Q1 to Q3 2024, highlights the urgent need for stricter fiscal discipline, especially amidst increasing calls for reduced governance costs. This comes despite a 40% rise in state statutory allocations from the Federation Account.

Our correspondent analyzed the budget reports from 29 states; however, data for Borno, Gombe, Kaduna, Kano, Kwara, Sokoto, and Ogun were unavailable for the period. The state governments have benefited from improved monthly allocations due to the elimination of fuel subsidies and the unification of the foreign exchange market.

The Nigeria Extractive Industries Transparency Initiative recently reported that N3.473 trillion was disbursed by the Federation Accounts Allocation Committee to all tiers of government in Q2 2024, marking a 1.42% increase from Q1. The federal government received N1.102 trillion (33.35%), 36 states shared N1.337 trillion (40.47%), and the 774 local councils got N864.98 billion (26.18%).

Despite this increased funding, there has been no notable improvement in the standard of living for citizens. A breakdown of expenditures shows that recurrent spending included significant costs such as travel, refreshments, and utilities. Lagos, Plateau, and Delta States were the highest spenders, with operating expenses totaling N375.19 billion, N144.87 billion, and N121.54 billion, respectively. Other states like Ondo and Bauchi followed, spending N107.34 billion and N99.31 billion.

In terms of loans, Niger State, led by Governor Mohammed Umar Bago, was the highest borrower, taking N79.09 billion in loans. Katsina followed with N72.89 billion, and Oyo State took N62.48 billion.

Revenue-wise, Lagos collected the most at N912.17 billion, followed by Rivers State at N269.18 billion and Delta at N97.02 billion.

Notable discrepancies between recurrent expenditure and revenue generation include Abia State, which spent N17.91 billion on operations and generated N22.15 billion in revenue, but fell short of its N32.14 billion target. Similarly, Adamawa borrowed N10 billion, while Akwa Ibom spent N43.98 billion more than it generated in revenue.

Other states like Anambra, Bayelsa, Cross River, and Delta also faced challenges, with some borrowing significantly to cover deficits while others failed to meet their revenue targets.

Despite the budgetary shortfalls and high governance costs, experts are urging for a focus on fiscal discipline. Professor Segun Ajibola of Babcock University, commenting on the findings, lamented the ongoing issue of excessive governance spending at the state level, exacerbated by poor oversight and accountability. He emphasized the lack of transparency from state assemblies, which has allowed governors to act without proper checks.

The Fiscal Responsibility Commission recently raised concerns about Nigeria’s fiscal federalism structure, warning that the current model may not be sustainable in the long term.