Mixed Reactions to Subnational Revenue Surge
The recent surge in subnational revenue has sparked a wide range of reactions across Nigeria, with stakeholders including labour union leaders, opposition parties, and civil society groups expressing both praise and concern. While the growth in Internally Generated Revenue (IGR) is seen as a positive development, many critics have raised questions about how these funds are being managed and whether they are translating into tangible benefits for citizens.
IGR Growth and Structural Weaknesses
According to data released by the National Bureau of Statistics, states’ combined IGR increased by 50 per cent to N3.63tn in 2024. This significant jump highlights the potential for greater fiscal autonomy at the state level. However, the data also reveals that many states remain heavily reliant on monthly disbursements from the Federation Accounts Allocation Committee (FAAC), underscoring the structural weaknesses in their economies.
Twelve states recorded over 50 per cent revenue growth, while 24 states posted less than 50 per cent, indicating a stark disparity in economic performance across the country. This uneven distribution has raised concerns about the long-term sustainability of state economies and their ability to generate sufficient revenue independently.
Labour Unions and Opposition Criticise Revenue Management
Labour unions and opposition parties have been vocal in their criticism of how some state governments are managing their newfound wealth. They argue that despite record revenues, there is little evidence of improved public services, infrastructure, or workers’ welfare.
The Nigeria Labour Congress (NLC) in several states has described the growth as “paper gains,” highlighting the lack of real-world impact on workers’ salaries, pensions, and healthcare. Union leaders have called for greater transparency and accountability in how states utilise their revenues.
Opposition politicians have also expressed concerns about fiscal discipline among governors. They have urged anti-graft agencies and auditors to investigate how states manage their finances, arguing that citizens deserve to see clear value for every naira generated.
State-by-State Performance and Concerns
In Ogun State, the PDP accused the current administration of failing to deliver on promised projects, citing poor road conditions and neglected local government functions. Similarly, in Sokoto, the PDP highlighted the abandonment of legacy projects, including a Teaching Hospital and market developments.
In Benue State, opposition leaders and labour unions criticised Governor Hyacinth Alia for his perceived lack of focus on governance. They argued that basic duties such as salary payments and pension settlements were not being met, and that ongoing road projects did not reflect the state’s financial capacity.
In contrast, some states have received praise for their fiscal management. In Plateau State, the NLC commended Governor Caleb Mutfwang for regular payment of workers’ salaries and implementation of the minimum wage. Similarly, in Kano, the NLC praised Governor Abba Kabir Yusuf for clearing arrears and paying gratuities.
However, even in these cases, concerns remain about the allocation of resources. The SDP Chairman in Bayelsa accused the government of prioritising flashy infrastructure projects over essential services like water supply and agriculture.
FAAC Disbursements and Fiscal Dependence
Despite the growth in IGR, the data shows that states still rely heavily on FAAC allocations. The total amount disbursed to the 36 states and the FCT in 2024 was N5.08tn, significantly higher than their combined IGR of N3.63tn.
This dependence raises concerns about the long-term sustainability of state finances. Experts warn that without stronger fiscal accountability, many states risk continuing a cycle of revenue growth without visible development.
High and Low Performers
Among the high performers in IGR growth were states like Enugu, Bayelsa, and Kano, which saw substantial increases due to reforms and improved revenue collection. Lagos, Rivers, and the FCT remained the top revenue generators, accounting for over 40 per cent of the national total.
Conversely, several states, including Adamawa, Anambra, and Zamfara, recorded low growth or even declines in revenue. These disparities highlight the need for targeted interventions to strengthen the fiscal capacity of underperforming states.
Conclusion: A Call for Accountability
While the surge in subnational revenue is a positive sign, it is clear that the true test lies in how these funds are used to benefit citizens. Stakeholders across the country are calling for greater transparency, accountability, and a focus on projects that directly improve the lives of Nigerians.
As the debate continues, the challenge remains for state governments to translate financial gains into meaningful development outcomes. Only then can the promise of increased IGR be fully realised.
