Statutory allocations from the Federal Account Allocation Committee to the 36 states and 774 local government areas increased to N3.34tn from July to December 2023, marking a rise of N545bn or 19.5% post-fuel subsidy era, according to figures obtained from the National Bureau of Statistics. The increase from N2.79tn distributed in the first half of the year prompted calls from Nigerians, including organized labor leaders, urging state governors to address the hardships faced by the masses.
President Bola Tinubu, in his inaugural speech on May 29, 2023, terminated the fuel subsidy regime, vowing to invest the savings in social programs and infrastructure. However, the removal of the subsidy led to a significant increase in the prices of products and services, impacting citizens’ livelihoods.
The Federal Government’s revenue-sharing formula designates 52.68% to the federal government, 26.72% to states, and 20.60% to local governments. The allocations in 2023 peaked at N627.73bn in September and N610.5bn in December, reflecting an overall increase compared to the first half of the year.
Comparing allocations to state governments and local governments in 2023 with the corresponding period in 2022, there was a 22% increase of N740bn. The Federal Government projected a substantial increase in allocations to states and local governments in 2024, reaching N14.04tn, with the expected rise attributed to exchange rate effects, higher oil production projections, and subsidy removal.
Despite the increased allocations, some Nigerians expressed dissatisfaction, citing poor road infrastructure, rising kidnappings, and insecurity. Labor leaders argued that the quality of life for citizens had not improved, and there were concerns about the lack of transparency and accountability in the utilization of funds by both federal and state governments.
Economist Austin Iraoya emphasized the need for institutions to monitor disbursements and fund utilization at the state level. Meanwhile, Governor Abba Kabir Yusuf of Kano State pledged to personally appeal to President Bola Tinubu to address the prevailing hardship in the state, highlighting the serious hunger situation exacerbated by soaring food prices. Yusuf urged businesses to provide essential commodities at affordable rates to alleviate the suffering of the people.
