Rivers State, a major oil-producing region in Nigeria and often referred to as the “Treasure Base of the Nation,” received 60.44% of its total revenue from the Federation Account Allocation Committee (FAAC) in 2023.
This is according to the analysis of a new report by BudgIT, which Nairametrics obtained on Wednesday.
The state has consistently demonstrated strong fiscal performance, ranking first in the BudgIT’s State of States fiscal assessment for two consecutive years, 2022 and 2023, showcasing impressive financial sustainability.
N203.56 billion IGR in 2023
The report reveals that Rivers State’s Internally Generated Revenue (IGR) saw significant growth, increasing from N191.87 billion in 2022 to N203.56 billion in 2023, reflecting a year-on-year rise of 6.09%.
This positions Rivers as the second-highest state in terms of IGR in 2023.
However, a substantial portion of the state’s income continues to come from federal allocations, which rose from N293.79 billion in 2022 to N339.53 billion in 2023, marking a 15.57% increase.
The state also received N15.62 billion in aid and grants, bringing its total revenue for 2023 to N561.73 billion.
The BudgIT report read, “Rivers has demonstrated a steady increase in IGR over the past few years. From N191.87bn in 2022, IGR rose to N203.56bn in 2023, representing a year-on-year growth of 6.09%, making Rivers the state with the second-highest IGR in 2023.
“Rivers State receives a sizable portion of its revenue from FAAC allocations as an oil-producing state. The state’s FAAC allocations increased from N293.79bn in 2022 to N339.53bn in 2023, a year-on-year growth of 15.57%. Rivers State also received N15.62bn in aid and grants in 2023, bringing the total revenue to N561.73bn.”
N730.86 billion expenditure in 2023
- Despite the impressive revenue figures, Rivers State recorded a sharp increase in expenditure, with total spending surging by 46% from N499.71 billion in 2022 to N730.86 billion in 2023.
- The increase is attributed primarily to capital investments, which rose by 65.3%, amounting to N563 billion in 2023 and accounting for 77.03% of the total expenditure.
- Operational expenses were reported at N167.86 billion, with personnel costs making up 76% of this figure at N128.24 billion, and loan repayments representing 12.82% at N21.52 billion.
N305.37 billion debt in 2023
On the debt front, Rivers State’s total debt increased by 15.35% from N264.72 billion in 2022 to N305.37 billion in 2023.
- Notably, the state saw a reduction in its foreign debt, which declined from N87.13 billion to N80.94 billion, reflecting a 7.10% drop.
- Despite the rising domestic debt, the state’s debt-to-revenue ratio of 54.36% remains well within the sustainable threshold of 200%.
- BudgIT’s report highlights that Rivers and Lagos were the only two states in Nigeria that generated sufficient IGR to cover their operating expenses.
- Rivers maintained an IGR-to-operating expense ratio of 121.26%, compared to Lagos’ 118.39%, emphasizing the state’s robust revenue generation capabilities.
- The state’s prioritization of capital expenditure was a key feature of its fiscal strategy, with 73% of its total spending channelled towards infrastructure projects—the highest among all states.
- However, the report cautioned that while Rivers’ financial outlook appears strong, attention must be given to debt management strategies to avoid fiscal strain.
Also, the report urged the current administration to focus on human capital development and address politically motivated violence, which could affect security, disrupt business activities, and lead to capital flight.
What you should know
The Federal High Court in Abuja, on Wednesday, issued an order barring the Central Bank of Nigeria (CBN) from further disbursing monthly financial allocations to the Rivers State government.
- According to the News Agency of Nigeria (NAN), the ruling also extends to the Accountant-General of the Federation (AGF), as well as Zenith Bank and Access Bank, where the state holds accounts.
- In her judgment, Justice Joyce Abdulmalik ruled that Governor Siminalayi Fubara’s receipt and use of monthly allocations since January 2024 constitute a violation of the constitution that cannot be permitted to continue.
- The judge described Fubara’s presentation of the 2024 budget to a four-member Rivers House of Assembly as a direct affront to constitutional requirements.
- She further stated that the governor’s budget implementation reflects a gross breach of the 1999 Constitution, which he is bound to uphold.
- Justice Abdulmalik consequently ordered the CBN, AGF, Zenith Bank, and Access Bank to block any further access by Fubara to funds from the Consolidated Revenue Fund and the Federation Account.
