States show economic might with N9.15trn combined budget, larger than FGs

by | January 27, 2018 10:35 am

Nigerian states are showing their economic prowess with a combined budget of N9.15 trillion for 2018, that is bigger than that of the Federal Government.

The 2018 Federal Government budget is less than the states’ overall budget for only the second time in four years, according to BusinessDay’s analysis of data compiled by civic organisation, BudgIt.

The states’ 2018 budget of N9.15 trillion is N540 billion or 6.3 percent higher than the Federal Government’s budget of N8.612 trillion in the same period under review.

“The sum of the 36 states budgets is higher than the federal budget due to the inclusion of Internally Generated Revenues and borrowings in the states’ budgets,” Johnson Chukwu, MD/CEO, Cowry Asset Management Limited told BusinessDay by mail.

The states’ 2018 budget, which summed up to N9.15trillion is higher than N6.75trillion states’ budget for 2017, N5.87 trillion in 2016 and also higher the N5.67trillion states’ budget for 2015.

This year’s states’ budget will mark the second time that the states’ budget will be higher than the federal budget since 2015.

This study only covered the period 2015-2018, as data available was for only this duration.

The states’ and federal budget is up 26.24 percent from N14.1 trillion in 2017 to N17.8 trillion in 2018.

About N5.9 trillion (41 percent) of the states’ and federal budget of 2017 were set aside for salaries and the remaining N7.6 trillion was for development projects.

A further analysis of the 2018 budget estimates shows the federal government is spending N8.61 trillion, out of which N5.96 trillion is for personnel salaries, overheads, statutory transfers and debt servicing, while the balance of N2.65 trillion is for capital projects.

“Inspite of the fact that the Federal government receives about 52 percent of the Federation Accounts allocations, the state governments share in virtually all the income sources accruable to the Federation, the Federal Government does not participate in the sharing of States internally generated revenue. Consequently, when all such IGR are aggregated with the states’ share of federal allocations and borrowings, the state’s end up with higher aggregate budget than the Federal Government,” Chukwu said.

Cross River state is in first position among the states with the highest budget for 2018 with a budget of N1.3trillion, followed by Lagos state with N1.04 trillion and Akwa-Ibom with N651.50 billion.