Nigeria is facing a severe economic crisis, as the rising cost of living has sparked protests across the country.
Hundreds of people have taken to the streets of Niger, Kano, Ondo, Oyo and other states to express their frustration over the high prices of food, energy and other essential commodities.
The protesters have blamed the federal government for failing to address the situation and provide relief for the masses.
However, some analysts have argued that Nigerians are too hard on the federal government and that they are not mounting enough pressure on their state governors, who are equally responsible for the welfare of their citizens.
According to the National Bureau of Statistics (NBS), the total amount allocated to the 36 states and the FCT from the federation account in 2023 was N4.54 trillion. This amount was derived from various sources such as statutory accounts, value-added tax, exchange gain difference, and electronic money transfer levy. The amount disbursed in 2023 was 5.4 per cent higher than that of 2022 (N4.31 trillion).
A breakdown of the allocation shows that the federal government received a total of N1.41 trillion; the states received a total of N1.29 trillion; the local governments received a total of N0.96 trillion; and the oil-producing states received a total of N0.87 trillion as derivation.
The top five states with the highest allocations in 2023 were Delta (N118.63 billion), Rivers (N95.18 billion), Akwa Ibom (N89.76 billion), Bayelsa (N81.97 billion), and Lagos (N69.98 billion). The bottom five states with the lowest allocations in 2023 were Cross River (N16.01 billion), Osun (N17.18 billion), Ekiti (N18.05 billion), Ogun (N18.59 billion), and Kwara (N19.11 billion).
However, there is a wide disparity in how the states have utilized their allocations, as some have performed better than others in terms of governance, transparency, accountability, and development.
According to online data, some states relied more on the federal allocation than their internally generated revenue (IGR) in 2023, while others were able to diversify their income and reduce their dependence on allocations from the federation account.
The states also differed in their borrowing plans to fund their budget deficits and developmental projects in 2024, with some opting for domestic loans, external loans, or capital market borrowings.
This shows that the amount of allocation a state receives is not necessarily a determinant of its performance, but rather how it manages and spends its resources.
In August 2023, the federal government announced a N5 billion palliative for each state of the federation, including the Federal Capital Territory (FCT), to cushion the impact of the removal of the petrol subsidy. Some reports suggest that only a few governors used the money to better the lives of their citizens. There are allegations that some governors merely converted the money into forex and kept it for themselves and their cronies!
Therefore, Nigerians should demand more accountability and transparency from their state governors, who have the constitutional mandate to provide basic services such as health, education, infrastructure, security, and social welfare to their people.
Rather than embark on endless foreign trips with no potential for value on their states’ economies and the well-being of their people or invest scarce resources on white elephant projects with little or no positive impact, state governors should invest in programmes with a direct positive effect on the people.
They should deepen their investment in the agricultural sector, social welfare programmes and job creation, so that more food will be made available to Nigerians.
The state governments should also diversify their revenue sources and reduce their dependence on the federal allocation, which is largely derived from the volatile oil sector.
The federal government, on its part, should continue to implement its economic recovery and growth plan, which aims to stimulate the economy, create jobs, and reduce poverty.
The government should also address the structural and institutional challenges that hinder the effective and efficient allocation and utilization of resources, such as corruption, insecurity, and poor governance.
The government should also ensure that the revenue-sharing formula among the three tiers of government is fair and equitable and that the states and local governments receive their due allocations promptly and regularly.
The cost-of-living crisis in Nigeria is a complex and multifaceted problem that requires a holistic and collaborative approach from all stakeholders. Nigerians should not only hold the federal government accountable but also their state and local governments, who are closer to them and have a greater impact on their daily lives. By doing so, Nigerians can ensure that their leaders deliver on their promises and improve their welfare.