Anambra State has emerged as Nigeria’s best-performing state in the 2025 Fiscal Performance Ranking released by BudgIT, marking a major milestone in subnational governance. The civic-tech organization’s annual State of States report, published on Tuesday, assessed all 36 states on parameters such as fiscal sustainability, revenue generation, debt profile, capital investment, and transparency. The 2025 edition, titled A Decade of Subnational Fiscal Analysis, Growth, Decline and Middling Performance, presents a telling story of how a handful of states are beginning to rewrite Nigeria’s fiscal playbook through prudence, innovation, and better governance systems.
At the top of this year’s ranking sits Anambra, followed closely by Lagos, Kwara, Abia, and Edo States, all of which demonstrated resilience and fiscal agility in an environment still recovering from sluggish national growth, subsidy removal pressures, and inflationary headwinds. The report highlights that only five states, Anambra, Abia, Kwara, Ogun, and Edo — generated enough Internally Generated Revenue (IGR) to fund at least 50 percent of their operating expenses, a metric that signals fiscal independence and managerial strength. In contrast, over 25 states still rely on federal allocations to meet more than 70 percent of their recurrent obligations, underscoring the uneven fiscal health across Nigeria’s subnational entities.
BudgIT’s data reveals that collectively, Nigerian states generated ₦3.8 trillion in IGR in 2024, up from ₦2.9 trillion the previous year — a 31 percent rise. However, disparities remain stark: Lagos alone accounted for nearly 30 percent of that total, generating about ₦1.1 trillion, while smaller states like Yobe, Ebonyi, and Taraba brought in less than ₦20 billion each. Lagos maintained its strong position in second place overall, driven by diversified revenue streams from its service economy, improved tax collection systems, and ongoing investments in digital governance infrastructure. Yet, while Lagos leads in absolute numbers, states like Anambra and Kwara have been praised for fiscal efficiency — spending less to achieve more and demonstrating lower debt exposure.
Kwara’s performance was especially notable. Ranked third, the state has steadily risen through the ranks in recent years by prioritizing capital investment and transparency. In 2024, Kwara devoted about 72 percent of its total expenditure to capital projects — one of the highest ratios in the country — and posted a debt service-to-revenue ratio below 10 percent, far better than the national average of 26 percent. Abia State, ranked fourth, also made impressive gains, propelled by reforms that improved its IGR from ₦19.4 billion in 2023 to ₦27.8 billion in 2024 , a 43 percent jump. Edo State rounded out the top five, buoyed by disciplined financial planning, enhanced property tax systems, and a focus on infrastructure renewal under its ongoing digital governance reform.
BudgIT’s findings also reveal that for the first time in years, state governments collectively allocated more to capital expenditure than recurrent spending. Total capital outlay rose to ₦7.63 trillion in 2024, representing an 88 percent increase from ₦4.06 trillion the previous year, while recurrent spending grew by just 17 percent. This shift signals a more investment-driven mindset among top-performing states, emphasizing infrastructure, education, and healthcare as growth enablers. However, despite these encouraging signs, the report also highlights execution gaps: on average, states implemented only about 67 percent of their education budgets and 58 percent of health budgets — a reminder that budgeting excellence must translate into on-the-ground delivery.
Beyond fiscal ratios, BudgIT assessed transparency , the degree to which states publish timely budget documents, citizen budgets, and expenditure reports. Lagos, Anambra, Ekiti, and Edo emerged as leaders in fiscal openness, each scoring over 80 percent in the Fiscal Transparency League. These states maintain functional e-procurement platforms and regularly update their Medium-Term Expenditure Frameworks (MTEF), citizen-friendly budget summaries, and implementation reports online. Transparency, the report argues, remains the cornerstone of sustainable fiscal performance: states with higher openness tend to attract greater investor confidence and achieve better development outcomes.
In contrast, states such as Kogi, Imo, Benue, Jigawa, and Yobe languish at the bottom of the fiscal performance index, burdened by weak revenue generation, heavy debt obligations, and limited budget transparency. For instance, Kogi’s debt servicing consumed over 35 percent of its total revenue, while Benue and Yobe spent more than 80 percent of their budgets on recurrent obligations. BudgIT notes that without significant reform particularly in local tax collection, expenditure discipline, and transparency , these states risk prolonged fiscal fragility.
At the national level, the 2025 State of States report paints a complex picture. While a few states are breaking free from dependence on federal allocations, the federation as a whole remains heavily centralized. On average, 62 percent of state revenues still come from FAAC disbursements, making them vulnerable to oil price volatility and federal fiscal policy swings. BudgIT calls for deeper fiscal decentralization, urging states to expand their IGR bases through property taxation, improved land administration, and public-private partnerships, especially in non-oil sectors like agriculture, services, and manufacturing.
Anambra’s ascent to the top symbolizes more than just good accounting; it signals a shift toward performance-oriented governance. The state’s ability to fund 60 percent of its operations internally, maintain one of the lowest debt-to-revenue ratios in the country (below 9 percent), and allocate nearly 70 percent of its expenditure to capital projects demonstrates strategic discipline. Similarly, Lagos continues to embody the scale and sophistication of fiscal modernization, Kwara represents the rise of smaller but well-managed economies, Abia shows how reform-minded administrations can deliver rapid progress, and Edo highlights the dividends of digitized governance. Together, these states are proving that subnational governments can lead Nigeria’s path toward sustainable growth if they combine fiscal prudence with transparency and developmental ambition.
Ultimately, BudgIT’s 2025 ranking is both a celebration and a challenge. It celebrates the few states that are charting new fiscal futures through innovation and accountability, but it also challenges the rest to catch up. Fiscal responsibility is no longer a technical metric; it is a governance imperative. As BudgIT’s report subtly suggests, Nigeria’s fiscal future may not depend solely on federal reforms but on how boldly its states learn to govern, generate, and grow.
No comments:
Post a Comment