According to an analysis of the state government approved budgets for the 2024 fiscal year, it was revealed that 24 state out of 36 states in Nigeria wont be able to pay their workers salary this year without waiting for the federal allocation from the central government.
11 (with the exclusion of Cross River State) out of the 36 state will only be able to independently pay their workers salaries without depending on the federal allocation. some of the state with good internal revenue are Lagos, Kano, Anambra, Edo, Enugu, Imo, Kaduna, Kwara, Osun, Ogun and Zamfara.
The 24 states are Bayelsa, Ondo, Yobe, Sokoto, Taraba, Plateau, Oyo, Niger, Nasarawa, Kogi, Kebbi, Katsina, Jigawa, Gombe, Ekiti, Ebonyi, Borno, Benue, Bauchi, Adamawa, Akwa-Ibom, Cross River, Abia, and Delta.
The approved budgets are also contained in Open States, a BudgIT-backed website that serves as a repository of government budget data.
According to 35 state (Cross river excluded from the 36 state) budget data uploaded, the budget analyst confirmed that only 24 states cannot fund salaries payments from their Internally-Generated Revenue and, as such, may have to rely on the Federal Government allocations or borrowing from banks and related institutions.
The development also means that the respective wage bills of the affected states surpassed their various IGRs, raising concerns about workers productivity and state governments’ efficiency in internal revenue generation.
The development is coming amidst clamour for wage increase by labour unions at both the federal and state levels, following the rising cost of living on the aftermath of fuel subsidy removal and unification of the foreign exchange markets by the current administration.
The Nigerian Labour Congress has consistently maintained that if inflation continues to rise, the organised labour may have no choice but to insist on a new minimum wage of N1m for Nigerian workers. The government however has rejected the demand.
In the first half of 2023, state governments borrowed about N46.17bn from three banks to pay salaries between January and June 2023. The findings were based on an analysis of the half-year 2023 financial statements of Access Bank Plc, Fidelity Bank, and Zenith Bank Plc
“Every governor in Nigeria is getting more money than we used to get. Before President Bola Tinubu removed the fuel subsidy, in Kaduna State, precisely in May 2023, we were borrowing to pay salaries but immediately after the subsidy removal, after paying salaries without borrowing, we had a surplus of money.”
“Going forward, what they could do is to identify one area of strength. For instance, Bayelsa has oil and should be able to attract investments. I think it is about policy. They should give the policy a chance that would allow people to come and invest. They should also create an attraction and develop an economic summit that will make sure they showcase and attract investors.”
“Even as we speak, many of them are also in debt and by the time they pay salaries and service their debts, there is not much left to improve on infrastructure. It’s in the interest of the sustainability of the states for them to be more creative in generating more revenue and attracting more investment to their states so that they can generate more revenue.
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