BudgIT, a civic organisation which aims to simplify the Ni­gerian budget and public data, making them more accessible, on Thursday published the 2022 edition of its fiscal performance ranking of Nigeria’s 36 states and the Federal Capital Terri­tory using key parameters like level of dependence on federal allocation, based on internal generated revenue, how much is devoted to capital projects, borrowing capacity.

The report titled, ‘Subnation­al Governance Reforms for a New Era,’ said 33 states derived 50 percent of their total revenue from federal transfers, of which 13 relied on “Abuja” for at least 70% of their total revenues.

This, the report noted, is why Nigerian state governments must wean themselves off the dependence on federally distrib­uted revenues by significantly improving their capacity to mo­bilise revenues internally, in the face of dwindling revenue being faced owing to Nigeria’s subsidy regime and the volatile price of crude oil, which has made over-reliance on federal trans­fers increasingly unsustainable.

The report, nonetheless, noted the 9.19 percent growth in cumulative revenues of the 36 states from N4.69 trillion in 2020, to N5.12 trillion in 2021, while aggregate IGR jumped by 33.66% year-on-year, from N1.2 trillion in 2020 to N1.61 trillion in 2021, even as most of “the states still rely heavily on federally dis­tributed revenues to implement their budgets.”

The cumulative expenditure of the 36 states increased by 27% from N5.23 trillion in 2020 to N6.64 trillion in 2021, with 31 states increasing their total expenditure from the previous year, while five states reduced theirs, led by Zamfara’s 15.59 percent.

Rivers State maintained its overall fiscal performance rank­ing topping the table like last year, while Kaduna and Cross River entered the top five league, while Yobe State dropped to the bottom five, after falling 13 plac­es from 21st in 2021 to the 34th position in 2022.

Further details of the report showed that only Lagos and Rivers generated more than enough revenues internally to take care of their operating expenses, even as those of Yobe and Bayelsa was over seven times the revenues generated by both states internally, reinforc­ing the heavy reliance on federal transfers and budget support to fund their budgets.

With the exception of Anam­bra, Kogi and Kebbi, 33 states re­corded growth in IGR from the previous year, 13 of which grew their numbers by over 50%, led by Jigawa, Delta, Ebonyi, Akwa Ibom and Nassarawa, which ranked top five.

In the area of debt sustain­ability, of the 36 states, the BudgIT ranked Cross River, Ogun, Imo, Osun, Plateau in the bottom five.

Explaining the research methodology, BudgIT broke down the report into index­es such as ability of states to meet their operating expenses (recurrent expenditure) with only their IGR, which was as­signed 25 percent (index A); per­centage year-on-year growth in IGR, which accounts for 20 percent (index A1); a review of the states’ ability to cover all operating expenses and loan repayment obligations with their total revenue (IGR, statu­tory transfers, aids and grants) without resorting to borrow­ing, which was assigned a 30 percent weight (index B). An estimate of debt sustainability based on debt as a percentage of GDP, debt as percentage of revenue, debt service as a per­cent of revenue, is weighted 15 percent (index C); and the degree to which each state prioritizes capital expenditure with respect to recurrent ex­penditure, which is assigned 10 percent (index D).

Based on this, the ranking showed that Lagos is the least dependent on the federation account for survival with 0.82 percent; slightly above Rivers with 0.83 percent; Kaduna, 1.33 percent; Ebonyi, 1.46 percent; Jigawa, 1.54 percent; Ogun, 1.69 percent; Cross River, 1.80 per­cent; Anambra, 2.14 percent; Kwara, 2.17 percent, and Oyo, 2.28 percent.