Governance cost surge by N900bn
As Nigerians call for reduced governance costs, the 2024 personnel expenditure for Nigeria’s 36 states has reached N2.76 trillion, This represents an increase from N2.26 trillion in 2023, marking an addition of approximately N901.88 billion over two years, with N501.16 billion added in just one year.
The data reveals that many states have consistently raised their wage bills over time, with notable increases in 2023. For instance, Taraba State saw its wage bill jump from an initial N37.62 billion budgeted for 2023 to N109.65 billion, though the actual expenditure from January to September 2023 was only N28 billion. For 2024, Taraba’s wage bill is set at N54.47 billion.
Imo State’s wage bill surged by 134.12 percent to N61.18 billion in 2024 from N26.13 billion in 2023, with 2023 expenditure standing at N20.35 billion. Rivers State’s budget for personnel costs almost doubled in 2024, rising to N252.89 billion from N128.78 billion in 2023, reflecting a 96.36 percent increase.
Conversely, Bayelsa and Ekiti States reduced their personnel budgets for 2024. Bayelsa’s wage bill decreased by 15.47 percent to N69.12 billion from N81.77 billion in 2023, while Ekiti’s fell slightly by 1.21 percent to N31.02 billion from N31.40 billion.
States with wage bills exceeding N100 billion include Oyo (N132 billion), Ogun (N122 billion), Delta (N164 billion), Akwa Ibom (N127 billion), Lagos (N302 billion), and Rivers (N252 billion).
Additionally, approximately 12 governors have appointed around 4,385 aides since taking office in 2023, with notable increases in Taraba, Ekiti, Niger, Enugu, Adamawa, Kano, Plateau, Akwa Ibom, Cross River, Borno, Yobe, and Kogi States.
The domestic debt of some states has also risen significantly. Niger State’s debt grew from N121.95 billion to N139.80 billion between June and December 2023 under Governor Mohammed Bago. Plateau State’s debt increased from N157.62 billion to N173.93 billion, while Cross River’s debt rose from N204.05 billion to N220.20 billion during the same period.
External debts also climbed, with eight states accumulating $89.75 million in new foreign debt in the first half of 2023. Cross River saw the highest increase, with its external debt rising from $153.17 million to $211.13 million. Other states with significant increases include Ekiti, Kano, Adamawa, Niger, and Taraba.
24 states would struggle to pay salaries without federal allocations, with only 11 states able to cover salary expenses independently. States with strong internal revenue include Lagos, Kano, Anambra, Edo, Enugu, Imo, Kaduna, Kwara, Osun, Ogun, and Zamfara. The remaining states may need federal support or loans to meet their wage obligations.
This situation is compounded by the expected increase in the minimum wage, which will likely further elevate state wage bills. A report from Dr. Afolabi Olowookere suggests that states like Benue, Osun, Oyo, Yobe, and Kogi may struggle with the higher wage, while Lagos, Imo, Zamfara, Kaduna, and Ebonyi are better positioned to handle it.
Olowookere recommends improving fiscal conditions, increasing revenue, and exploring other financing methods such as tax hikes, borrowing, and reducing staff redundancies. Economists and experts call for a reduction in the number of political appointees, better fiscal management, and investment in technology to streamline operations.
Critics argue that the hiring of additional aides during a period of economic hardship exacerbates financial strain and inefficiencies. They advocate for prioritizing essential services and addressing corruption to better manage state resources and improve governance.
