Emmanuel OchayiIn a projection for the year 2024, state governments in Nigeria anticipate an increase in statutory federal allocations, marking a 69% rise to N5.54 trillion
Prime Business Africa reports that this surge, amounting to N2.24 trillion more than the disbursed amount in 2023, is poised to reshape financial dynamics across the nation.
“We welcome this increase in federal allocations, as it will greatly bolster our efforts towards sustainable development and meeting our obligations,” remarked a state official, echoing the sentiments shared by many state governments nationwide.
Notably, Lagos State emerges as the frontrunner, set to receive the highest revenue of N596.63 billion, followed closely by Delta and Akwa Ibom.
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However, despite this promising financial outlook, a shadow looms over the fiscal landscape as 32 states express intentions to borrow N2.78 trillion from domestic and external sources to fund their 2024 budgets.
“Although the projected revenue increase is promising, we must remain cautious and proactive in managing our financial affairs,” cautioned an economic analyst. “The persistence of borrowing plans raises concerns about the sustainability of state debt levels.”
Analyzing the borrowing strategies outlined by various states reveals a diverse array of financing mechanisms.
From domestic loans to external financiers, each state navigates its unique path to bridge budget deficits and finance developmental projects.
For instance, Adamawa State charts a course reliant on domestic loans totaling N51.52 billion and external loans of N16.94 billion, while Anambra State plans a blend of financial institution loans and capital market borrowings.
Similarly, states like Edo, Gombe, and Imo unveil their borrowing blueprints, each tailored to their specific financial needs and resources.
As the nation progresses into 2024, the dual narrative of increased revenue allocations and persistent borrowing underscores the complex financial terrain confronting state governments.
Balancing fiscal prudence with developmental imperatives remains paramount in charting a sustainable path forward amidst evolving economic landscapes.
