With almost 40 days into the new year, state governors are already setting the estimation for their financial expenditure. Being an electioneering year, some state governments might either hand over to a new government or transition into another tenure.
However this turns out, the budget provides the expenses that the state would be allocating for itching within the period of 12 months.
While the process of preparation differs by the state in terms of revenue, federal allocation, administration structure and project captivity, the mechanics of arriving at a proposed amount are expected to contribute to the state’s development.
The budget, despite having no timeline for preparation, is presented by the governor as an estimation. Upon deliberation by the legislators, it is passed as the working bill for the year.
Like other countries, the budget process in Nigeria has four stages; formulation, approval, implementation and control. Meanwhile, over several administrations of governance, concerns about accountability, clarity, performance and source of revenue have criticised these budgets during their presentation, signing and budget year period.
A bulk number of states still rely on the federal government revenue to implement their budget. BudgIT says in its State to State 2022 report that at least 50% of the total income of 33 states is federal transfers, while 13 states relied on federal transfers for at least 70% of their total revenues.
However, there has been declining revenue generated by the state compared to the expenditure of these states over a budget period.
BudgIT however noted that 31 States increased their total expenditure from the previous year, and 5 States reduced their expenditure—with Zamfara having the highest decline of 15.59%.
Recently, the National Bureau of Statistics published in its IGR report that the 36 states of the federation and the federal capital territory (FCT) recorded N1.89 trillion in internally generated revenue (IGR) in 2021 a 22 per cent growth when compared to N1.56 trillion IGR in 2020.
The report said that Lagos state had the highest IGR with N753.3 billion, representing 40 per cent of the total IGR in 2021 followed by FCT with N131.9 billion; Rivers with N123.3 billion; Ogun with N100.7 billion; and Delta with N80.2 billion.
Yobe state, on the other hand, generated the least IGR (N8.5 billion) in 2021, followed by Taraba with N9.6 billion, Gombe with N10.6 billion and Katsina with N12 billion. IGR by zones in 2021 showed that the south-west zone recorded the highest revenue, totalling N972.6 billion; followed by the south-south zone with N313.6 billion, while the north-east zone recorded the least internally generated revenue with N78.3 billion.
Check out our dashboard on budgets in Nigeria
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Estimations for 2023
Lagos state has always led other states in terms of projected expenditure and revenue generation. For 2023, the state proposes to spend N1.7trillion with a capital-to-recurrent ratio of 55:45 per cent. This is higher than the N1.4 trillion presented for the 2021 budget, which was later increased to N1.758 trillion passed.
In Akwa Ibom state, Udom Emmanuel presented a budget estimate of N697.005 billion for the 2023 fiscal year. The budget, christened ‘Budget of Completion’, has a Capital Expenditure of N353 billion and N344.005 billion for recurrent expenditure, totalling N697.005 billion as against the previous year’s revised provision of N631.881 billion.
Other states with a higher budget proposal include Delta state with N561.8bn, Ogun with N472.2bn, Bayelsa with N385.2bn, Cross River with N330bn and Anambra with N258.9bn.
However, states like Ekiti, Osun, Ebonyi, Adamawa and Yobe are presenting a budget as low as N113.6bn, N136bn, N139bn, N163bn, and N164bn respectively.
- Upon deliberation, estimations presented by the state government might either be increased or decreased when it is being assented to.
- Over 70 per cent of these states might be funding their budget from the federal allocation as their IGR might not suffice,
- A large majority of states affected by the flooding would tailor their budget toward capital project.
Note: At the time of collecting data for this report, about 13 state are yet present their 2023 proposed budget