Twenty one states of the federation are seeking loans amounting to N1.65 trillion to fund their 2024 budget deficits despite the increase in the allocations they have received from the Federation Account Allocation Committee (FAAC) in the last one year. ..Read Full Article
From June 2023 to June this year, all the 36 states and the 774 local governments received a total of N7.6 trillion from FAAC. This increase in revenue is largely due to the removal of petrol subsidy by the federal government on May 29, 2023.
Findings by Daily Trust show that the 36 states are projected to receive N5.54 trillion from FACC for this year as against the N3.3 trillion disbursed to them last year.
Under the current revenue-sharing formula, the federal government receives 52.68 percent; while states and local governments get 26.72 percent and 20.60 percent respectively. Such federation revenues, in addition to internally generated revenues of each tier, are expected to facilitate development across the three tiers of government, and also ensuring that the governments fulfill their financial obligations.
The FAAC allocations to local governments for June were paid directly to the state governments.
The Supreme Court had, on July 11, affirmed financial autonomy for the local governments. The apex court directed that the financial allocations meant for all the 774 local government areas in the country be paid to them directly. It said it is unconstitutional for state governments to keep and manage allocations on behalf of the local governments.
States’ borrowing patterns
Investigations by Daily Trust show that 21 states have expressed intentions to borrow a total sum of N1.650 trillion from both internal and external sources to fund their 2024 budget deficits.
Other states are yet to upload their borrowing plans. According to details of the borrowing plans made public,
Adamawa State Government is to borrow N68.46 billion;
Anambra N245 billion;
Bauchi, N59.08 billion;
Bayelsa, N64 billion;
Benue, N34.69 billion;
Borno, N41.71 billion;
Ebonyi, N20.5 billion;
Edo, N42.71 billion;
Ekiti State, N27.15 billion;
Jigawa, N1.78 billion;
Kaduna, N150.1 billion,
Kebbi, N36.7 billion;
Katsina, N163.87 billion;
Kogi, N37.08 billion;
Kwara, N30.76 billion;
Osun, N12.36 billion;
Oyo, N133.4 billion;
Nasarawa, N32.93 billion;
Gombe, N73.75 billion;
Enugu, N103 billion and
Imo, N271.34 billion.
The monthly FAAC allocations to the 36 states and the 774 local governments from June last year to June this year stood at N7.6 trillion. This represents an increase of over 40 per cent.
In June 2023, states got N299.92 billion; local government councils (LGCs), N221.79. July: states, N310.670 billion, LGCs, N229. 409 billion. August: states, N319.52 billion; LGCs, N236.23 billion. September: states, N361.19 billion; LGCs, N266.54 billion. October: states, N287.07 billion; LGCs, N210.90 billion. November: states, N379.41 billion; LGCs, N278.04 billion. December: states, N396.693 billion and LGCs, N288.928 billion.
Allocations from Value Added Tax also rose year-on-year by 228.8 percent to N2.42 trillion in the first five months of 2024, up from N736.06 billion in the first five months of 2023.
The 13 percent derivation fund received by oil producing states also rose by 234 percent to N519.83 billion in the first five months of 2024, up from N155.5 billion in the first five months of 2023……Read Full Article