The handling of federal allocations by state governments has faced criticism from the Nigeria Labour Congress, opposition parties, and economists, following a combined allocation of N5.22tn to the 36 states in 2024.
Experts have offered differing opinions on the justification for the allocation of such funds.
This scrutiny comes as President Bola Tinubu emphasized the vital role of state governors in Nigeria’s development. He highlighted that 65% of the federation’s revenue is allocated to states, underlining their central role in driving food security, economic growth, and national prosperity. The President made these remarks during a New Year visit by the Nigeria Governors Forum at his Ikoyi residence, where he expressed gratitude to the governors for their support and cooperation in tackling key issues for the nation’s progress.
Meanwhile, The statutory allocations from the Federal Account Allocation Committee (FAAC) to all levels of government increased by N4.99tn, reaching N15.12tn in 2024.
The amount indicates an increase of 49.24 per cent from N10.14tn disbursed to meet their obligations in 2023.
An analysis of the monthly communique issued by the committee showed that the 36 state governments got the highest allocation of N5.22tn, representing 34.5 per cent of N15.14tn total allocation to the three tiers of government.
This was followed by the Local Government areas with N4.97tn and central government with a revenue allocation of N4.95tn.
When compared, the states got an increase of 45.5 per cent from N3.585tn in 2023, while allocation to the local government increased by 96 per cent and central government by 25.6 per cent.
But if added with the LG allocation of N4.95tn, the amount increases to N10.19tn, indicating 67.3 per cent of total allocation.
The Federation Account Allocation Committee disburses allocations from the revenues generated into the Federations Accounts, which comprise multiple accounts specific to an or a sector/ business type.
The bulk of the revenue shared at FAAC meetings by the federal, state, and local governments are earnings from oil exports, taxes, and other statutory allocations.
