RipplesMetrics: Despite rise in FAAC allocation, poverty ‘glows’ in states amid rising debt burden

Despite the significant inflow of money into the coffers of Nigerian states, from the federation account, residents still face misery.

The National Bureau of Statistics (NBS) recently released figures of how much states received from the federation account in 2022 which is to help support the development efforts of state governments.

According to NBS data, the Federation Account Allocation Committee (FAAC) increased its allocation to states by 30.5 percent to N3.16 trillion in 2022, up from N2.42 trillion in 2021 and N2.23 trillion in 2020.

The bulk of the revenue are earnings from oil exports, taxes, and other statutory allocations.

Further breakdown of the NBS data showed Delta got N370 billion; Akwa Ibom, N293 billion; Rivers, N283 billion; Bayelsa, N250 billion; and Lagos, N225 billion, making them the states with the highest revenue allocations from the federal government in 2022.

Other states include Kano (N113 billion), Edo (N104 billion), Oyo (N96 billion), Ondo (N91 billion), Imo (N89 billion), Kaduna (N88 billion), Kastina (N83 billion), Borno (N80 billion), Bauchi (N79 billion), Niger (N77 billion), Jigawa (N75 billion), Anambra (N75 billion), Benue (N74 billion), and Sokoto (N73 billion).

The others are Kogi (N72 billion), Abia (N70 billion), Plateau (N69 billion), Kebbi (N69 billion), Enugu (N68 billion), Adamawa (N67 billion), Zamfara (N66 billion), Ogun (N66 billion), Crossriver (N66 billion), Yobe (N64 billion), Gombe (N63 billion), Taraba (N63 billion), Ogun (N63 billion), Ekiti (N61 billion), Ebony (N61 billion), Kwara (N61 billion), and Nassarawa (N60 billion).

Debt piles up, poverty smiles

Despite the increase in allocation to states, the domestic debt and poverty outlook are increasingly darkening.

From N3.03 trillion in 2015, the state governors collective debt profile, together with that of the FCT, has climbed to N5.36 trillion as at the end of September 2022.

According to Debt Management Office, breakdown of states’ debts shows that Lagos State government is leading the pack with N797. 304 billion of the N5. 281 trillion.

In other words, the state owes 15 per cent of what is owed by the sub-nationals, as of June 30, 2022. Lagos has the highest internally generated revenue (IGR) (about N40 billion) every month.

Data from DMO indicated that Delta, Ogun, and Rivers states follow Lagos with N378. 878 billion, N241. 782 billion, and N225. 505 billion respectively.

Other highly indebted states include Imo, N210. 394 billion; Akwa Ibom, N203. 951 billion; Cross River, N 176. 086 billion; Oyo, N159. 906 billion; Ogun, N150. 529 billion; Bayelsa N 150. 430 billion; Plateau N144. 608 billion; Benue N143 . 547 billion Bauchi, N129. 207 billion; Kano N125. 186 billion, and Gombe N123. 608 billion.

The others are Ondo, N62. 270 billion; Kastina N66. 675 billion; Anambra N72. 429 billion; Nassarawa, N72. 965 billion; Kaduna N78. 194 billion; Sokoto N89. 920 billion; Taraba N 90. 807 billion; and Yobe with N 96. 624 billion.

Additionally, Abia owes N107. 612 billion; Borno, N102. 496 billion; Edo, N112. 118 billion; Ekiti, N119. 543 billion; Enugu, N89. 887 billion; Kano, N125. 186 billion; Kogi N90. 538 billion; Kwara N 110. 512; and Niger State with N80. 919 billion, while the Federal Capital Territory owes N75. 783 billion.

Conversely, Jigawa has the least debt of N45. 135 billion, followed by Ebonyi and Kebbi states with N59. 171 billion, and N60. 417 billion respectively.

Poverty ‘glows’

The heavy debt burden implies that poverty is spreading, such that so many states are collapsing, with citizens unable to find jobs, and states are not building functional infrastructure to attract investors.

NBS in its recent said National Multidimensional Poverty Index Report revealed that more than 133 million Nigerians, representing 63 per cent of the population are poor due to a lack of access to health, education, good living standards, and rising rate of youth unemployment.

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The report ranked Sokoto, Bayelsa, Jigawa, Kebbi, and Gombe states as the poorest states in Nigeria.

NBS says the indicators, which showed the above states are the poorest states, include nutrition, food insecurity, time to healthcare, school attendance, years of schooling, school lag, water, water reliability, sanitation, housing materials, cooking fuel, assets, unemployment, underemployment, and security shock.

A section of the report painted the hardship in states thus: “It is vital to understand the level of poverty by state. Poverty levels across states vary significantly, with the proportion of the population (incidence) living in multidimensional poverty ranging from a low of 27 percent in Ondo to a high of 91 percent in Sokoto.

“It will be more expensive to reduce poverty in Zamfara, where the intensity of poverty is higher, at 42 percent, than in Lagos (34 percent), because each poor person in Zamfara, on average, faces more deprivations at the same time.”

According to the report, Bayelsa is distinct from the other poorer states in having the largest contribution across all states in unemployment and shocks.

“Even when comparing Kebbi and Jigawa, which are somewhat more similar, we see a much greater challenge in access to water and greater nutritional deprivations in Kebbi, as well as school lag and underemployment in Jigawa,” it added.

So, where is the money from federation account and government going to?

A report by BudgIT, a civic organisation driven to make the Nigerian budget and public data more understandable and accessible, said: “State governments’ recurrent costs have increased significantly over the years with only a small portion of collected revenue and loans dedicated to meet capital.”

“This spending pattern is not sustainable as this has opened gaps in providing quality healthcare services and educational systems, thus slowing down social development as well as growth in other key areas of the economy,” BudgIT added in its report titled “Patterns in States’ Expenditure”.

Also, Comrade Emma Onwubiko, the National Coordinator of the Human Rights Writers Association of Nigeria (HURIWA), noted that state governors were not living as though they recognise that their states are in crisis.

According to him, “They are not even bothered. Despite the misery on their doorstep, many of the states are still on a spending binge. The travel budget of a state governor is in most cases far bigger than the education budget of their states, even when the schools within their jurisdictions operate under trees, or are at best rag-tag enclosures with squalid infrastructure.

“Many of the state governments have scores of agencies and commissions which add no value to governance. Huge sums of money are expended annually on aides, with no defined jobs.”

A political affairs commentator, John Ohio, added: “Recently, Rivers State Governor, Nyesom Wike announced that the number of his Special Assistants on Political Unit Affairs has increased from 100,000 to 200,000.

“Their job is to send feedbacks from the people at the grassroots to the state government, who does this in an area of mobile phone spread.

“These are some of the challenges facing states and it will get worst in the coming because it has been normalized.”

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