NIGER State’s 2025 budget has again raised concerns, with the government proposing an ambitious N1.56 trillion expenditure, despite a history of low budget performance and heavy reliance on federal allocations.
Given the state’s weak internally generated revenue (IGR) and inconsistent foreign investments, analysts are questioning whether this budget is grounded in financial reality or political optimism.
A review of Niger State’s financial performance in recent years shows recurring gap between budget projections and actual execution. In 2023, the government revised its budget from ₦243.6 billion to ₦473.95 billion, yet only 40.29 per cent was implemented.
Similarly, in 2024, despite increasing the budget to ₦829.43 billion, performance by the third quarter stood at just 30.42 per cent, raising concerns over the feasibility of the 2025 proposal.
Reliance on FAAC, weak IGR, low FDI
The ICIR reports that the state has struggled to boost its internally generated revenue, with earnings between N5.7 billion and N21.6 billion from 2014 to 2023. The earnings saw a gradual increase over the years, starting from NGN 5.7 billion in 2014 and rising to NGN 5.9 billion in 2015.
In 2016, there was a slight decrease to NGN 5.8 billion but earnings picked up again in 2017, reaching NGN 6.5 billion.
A significant jump occurred in 2018, with earnings surging to NGN 10.4 billion, followed by further growth in 2019, reaching NGN 13.6 billion. However, 2020 saw a decline to NGN 10.5 before a recovery in 2021, where earnings climbed to NGN 16.2. This upward trend continued in 2022, with earnings reaching NGN 16.9. before peaking at NGN 21.6 in 2023.
In contrast, the state’s total Federation Account Allocation Committee (FAAC) allocations between 2015 and August 2024 reached N544.54 billion, making FAAC the primary revenue source.
The allocations from FAAC stood at N66.09 billion between January and August 2024, according to The ICIR analysis. In 2023, the state got N78.9 billion while in 2022, it got N63.2 billion from the same FAAC allocation. The trend shows an increase from 2020, when the state got N54.5 billion.
Similarly, the state’s FDI inflow has been inconsistent. Between 2019 and 2024, Niger State secured only $17.92 million (approximately N25 billion) in Foreign Direct Investment (FDI), with zero inflows recorded in 2021, 2022, and the third quarter of 2024.
In 2020, the state recorded $16.36 million, but the inflows dropped drastically to $1.5 million in 2023.
With a projected N140 billion in total revenue for 2024, Niger State is already struggling to finance its revised 829.43 billion budget.
The new N1.56 trillion proposal for 2025, however, raises question of where the extra funding will come from as experts say even in an optimistic scenario where FAAC increases and IGR improves, the state still faces a funding gap of over N1.4 trillion.
Meanwhile, this isn’t the first time Niger State has set high financial targets without meeting them. In 2023, the government revised its budget from N243.6 billion to N473.95 billion, but actual performance stood at just 40.29 per cent. The same pattern continued into 2024, with only 30.42 per cent of the budget executed by the Q3.
This was the same situation in 2019 and and 2022 when the state recorded 42.27 per cent and 41.84 per cent respectively.
While the government may be banking on increased federal allocations or borrowing, experts warn that an over independence on FAAC makes the budget vulnerable to external economic shocks.
Harrison Edeh, a financial and economic journalist, explained that without a significant boost in internal revenue and sustained foreign investment, the ambitious budget targets will remain out of reach.
He further highlighted concerns over the ambitious nature of the budget, which largely depends on federal oil revenue allocations.
He noted that fluctuations in oil prices, combined with Nigeria’s inconsistent fulfillment of OPEC quotas, could jeopardise state funding if not offset by robust internal revenue streams.
He also emphasised the urgent need for Niger State to capitalise on its vast mineral and agricultural resources to reduce its heavy reliance on Federal Allocation (FARC) for revenue.
Edeh argued that tapping into agribusiness and other local industries could dramatically boost the state’s economy, noting that given Niger State’s extensive arable land, there is significant potential for large-scale agricultural ventures.
“The budget is overly ambitious because most of the budget estimates and the budget generalists relied on allocations from the federal government allocation so when you look at what the state is generating internally and their domestic debts you may not be convinced that they will be able to fund that kind of budget without relying on maybe developmental agencies. So the most important thing is that they cut their clothes according to their size and focus on maintaining a trajectory that will enable them to meet at least 80 or 90 percent of the budget because with the oil price fluctuations many states may not be able to fund the budget if Nigeria for instance did not meet up with OPEC quota of oil many states will not be able to fund their budgets.”
“Niger State is blessed with lots of mineral resources. They can look into agriculture, instead of depending holistically on FAAC allocation. It’s very important that they look at other sources of revenue for the states, so that they cannot just be relying on FAAC for their needs. They had arable land, which is larger than some countries. So, they can do farming as an agribusiness,” he added.
Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M