Fiscal Accountability: Rivers, Lagos Lead In Ranking

A civic-tech organisation, BudgIT, has rated Rivers State as the leading state in fiscal performance in Nigeria in its maiden edition of its fiscal performance ranking for states.
BudgIT, in its report launched during the week, said Rivers State maintained the number one spot in the fiscal performance throughout 2023.
The report was titled, ‘Moving Healthcare Delivery from Suboptimal to Optimal.’ It used five different metrics for ranking all 36 states.
The metrics include Index A, which examined ability of states to meet operating expenses (recurrent expenditure) with only their internally generated revenue.
“Index A1 looks at the percentage year-on-year growth of each state’s IGR. Index B reviews states’ ability to cover all operating expenses and loan repayment obligations with their Total Revenue (Internally Generated Revenue + Statutory Transfers + Aids and Grants) without borrowing,” BudgIT said.
“Index C estimates the debt sustainability of the states using four major indicators. A. foreign debt as a percentage of total debt. B. debt as a percentage of revenue. C. debt Service as a percentage of revenue, and D. personnel cost as a percentage of revenue. Index D evaluates the degree to which each state prioritises capital expenditure over its operating expenses (recurrent expenditure).”
The firm said the top five states were Rivers with 250 points out of the set 100-point marker, followed by Lagos (143/100), Anambra State (139/100), Kwara (120/100), and Cross River (111/100).
“Kebbi State achieved the most remarkable improvement, jumping 12 places from 28th to 26th, while Jigawa State experienced the steepest decline, dropping 16 spots to land at the 36th position. Rivers and Lagos were the only two states that generated more than enough IGR to cover their operating expenses, with IGR to operating expense ratios of 121.26 percent and 118.39 percent, respectively,” BudgIT said.
“Several other states, including Ogun, Anambra, Cross River, Kwara, Kaduna, and Edo, managed to generate IGR sufficient to cover at least 50% of their operating costs, with the rest relying on federal transfers.”
BudgIT also said the combined revenue of all 36 states in Nigeria increased significantly by 31.2 percent from N6.6 trillion in 2022 to N8.66 trillion in 2023.
“This growth rate exceeded the previous year’s increase of 28.95%, indicating a notable improvement in fiscal performance. Of the total revenue generated in 2023, Lagos State contributed N1.24 trillion, representing 14.32% of the cumulative revenue of the 36 states,” the report added.