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States see significant boost in federal allocations amid economic reforms

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In a substantial fiscal development, at least ten states across Nigeria have experienced an impressive surge of 50 percent or more in their monthly federal allocations.

About 12 out of the 36 states received an increase of at least 40 percent, reflecting a broader trend of rising revenues from statutory federal funds.

Data from the Federation Accounts Allocation Committee (FAAC), as compiled by the National Bureau of Statistics, indicate that total allocations to the 36 states increased by 27 percent, reaching N4.5 trillion from N3.58 trillion over a comparative 12-month period.

A detailed analysis of revenue distribution between June 2022 and May 2023, versus June 2023 to May 2024, shows that in the first five months of 2024 alone, the federal government, 36 states, and 774 local governments shared N10.13 trillion as statutory allocation from the federation account.

Among the states experiencing over 50 percent increases are Abia, Benue, Ekiti, Katsina, Kwara, Lagos, Ogun, Osun, Plateau, and Taraba. Additionally, Adamawa, Anambra, Borno, Cross River, Ebonyi, Enugu, Kano, Kebbi, Nasarawa, Niger, Oyo, and Sokoto saw increases of more than 40 percent.

The FAAC disburses allocations from revenues generated into the Federation Accounts, encompassing various accounts related to specific sectors and business types. Major revenue sources include oil exports, taxes, and other statutory allocations.

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The current revenue-sharing formula allocates 52.68 percent to the federal government, 26.72 percent to states, and 20.60 percent to local governments.

Under President Bola Tinubu’s administration, the federal government received N4.75 trillion, a 28.3 percent rise from the N3.7 trillion disbursed under his predecessor.

State government allocations saw a significant jump of 53.8 percent to N4.54 trillion from N2.95 trillion, while local governments witnessed a 76 percent increase to N3.84 trillion from N2.18 trillion.

State-specific data highlights notable increases: Abia’s allocation surged by 50.5 percent to N95.05 billion, Adamawa’s by 43.7 percent to N91.89 billion, and Anambra’s by 42.13 percent to N114.52 billion. Benue experienced a 53.46 percent increase, and Lagos saw a remarkable 59.6 percent rise to N253.92 billion.

However, not all states saw gains. Akwa Ibom’s allocation declined by 14.3 percent to N294.06 billion, and Bayelsa experienced a slight dip of 0.22 percent to N261.03 billion.

Other states recording significant increases include Borno (46.05 percent), Cross River (45.66 percent), Ebonyi (40 percent), Ekiti (55.8 percent), Enugu (42.82 percent), Katsina (50.57 percent), Kebbi (45.54 percent), Kwara (55.48 percent), Nasarawa (43.94 percent), Niger (43.14 percent), Ogun (70.15 percent), Osun (75.59 percent), Oyo (41.71 percent), Plateau (55.95 percent), Sokoto (49.20 percent), and Taraba with a 60.86 percent surge.

This substantial increase in federal allocations is poised to bolster state-level development and enable governments to better meet their obligations, driving forward Nigeria’s economic growth and stability.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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