2023 Expenditure: States Spend ₦1.7 Trillion On Trips, Meals, Others, Borrow ₦988 Billion

In the initial nine months of 2023, the 36 states within the federation allocated a total of ₦1.71 trillion for recurrent expenses, encompassing allowances, foreign travel, office supplies, aircraft upkeep, and various other items.

This information is derived from an analysis of budget performance reports obtained from Open Nigerian States, a website supported by budgIT that functions as a repository for government budget data.

Among the states examined by The PUNCH, 24 provided budget implementation data spanning the first three quarters of the year, while 12 states had data for the initial two quarters.

Throughout the data period considered, the states collectively disbursed ₦802.43bn on salaries. However, The PUNCH focused exclusively on other recurrent expenditures, excluding salaries. The overall recurrent spending figure would have amounted to ₦2.52tn if salaries were included.

This report delves into various recurrent spending categories, such as expenses related to foreign and domestic travel, Internet usage fees, entertainment, food supplies, honorariums/sitting allowances, wardrobe allowances, telephone bills, electricity charges, office supplies, anniversaries/special days, welfare, aircraft maintenance, and more.

Out of the 36 states, only 30 have thus far allocated security votes totalling ₦87.45bn. Additionally, the cumulative borrowings of the states have reached ₦988bn by the third quarter of 2023.

During the first nine months of 2023, Abia expended ₦17.61bn on various non-salary items, encompassing housing/rent allowance, meal subsidy, entertainment allowance, wardrobe allowance, social benefits, pension, gratuity, internet access charge, telephone charges, local and international travels, office stationeries, maintenance services, consulting and professional services, fuel, financial charges, miscellaneous expenses, and more.

In the initial two quarters, Akwa Ibom directed ₦92.54bn towards allowances, social contributions, travel and transport, utilities (including electricity charges and internet access charges), materials and supplies (such as office stationery, drugs, laboratory and medical supplies), maintenance, training, and more.

Notably, the state allocated ₦10 million for hosting/mobilization of political associations and interest groups, ₦841.83 million for entertainment at meetings, and more.

As of the end of Q3, 2023, Adamawa’s non-salary expenditure reached ₦40.90bn. This included ₦1.29bn for furniture allowance, ₦1.19bn for travel and training (both domestic and foreign), ₦214.37m for office stationery and consumables, and ₦413.32m for refreshments and meals as part of its recurrent expenditure.

Anambra’s non-salary spending amounted to ₦15.17bn by the end of Q2, 2023, while Bauchi’s was ₦70.25bn. By the close of Q2, 2023, Bayelsa had utilized ₦58.26bn for non-salary recurrent expenditure, which covered ₦2.18bn for training and travel, ₦1.81bn for welfare packages, ₦78.60m for burial logistics, ₦1.48bn for town hall meetings expenses, ₦48.20m for praise night/thanksgiving expenses, ₦17.70m for marriage ceremony support, and more.

Benue’s non-salary spending stood at ₦34.44bn, including ₦387.55m for special day celebrations, ₦434.17m for welfare packages, ₦7.06bn for security votes, and ₦1.23bn for materials and supplies such as office stationery and books.

Borno’s non-salary expenditure reached ₦32.63bn by the end of Q3, 2023, while Cross Rivers allocated ₦43.71bn, Delta spent ₦152.15bn, Ebonyi utilized ₦30.91bn, and Ebo expended ₦41.11bn.

Ekiti’s non-salary spending stood at ₦31.33bn by the end of Q2, 2023, including ₦2.74bn on local and international travel and transport, and ₦1.97bn on miscellaneous items such as welfare packages, refreshments, honorarium, sitting allowances, and more.

As of the end of Q3, 2023, Enugu’s non-salary spending amounted to ₦33.36bn, and Gombe spent ₦24.73bn (for Q1 and Q2). Imo’s total non-salary spending was ₦58.21bn, with ₦1.21bn allocated to refreshments and meals, ₦866.81m for welfare packages, ₦3.26bn on allowances, and more.

Jigawa’s non-salary spending was ₦49.64bn, including allowances of ₦22.07bn, ₦1.18bn on transport and travel, and ₦1.83bn on materials and supplies, encompassing drugs, vaccines, medical supplies, stationery, and more.

Kaduna’s non-salary spending reached ₦27.87bn as of the end of Q3, and Kano allocated ₦17.79bn (Q1 and Q2), Katsina spent ₦40.49bn, Kebbi utilized ₦24.51bn, Kwara’s expenditure was ₦41.19bn, and Kogi allocated ₦58.02bn.

Lagos’s non-salary spending amounted to ₦289.49bn, covering various expenses such as ₦741.34m for severance pay for political office appointees, ₦340.95m for aircraft maintenance, ₦8.07bn for plant and generator costs, ₦1.13bn for special days/celebrations, ₦107.79bn for special duties, servicing of meetings at ₦11.45bn, ₦2.53bn for welfare packages for the public, ₦3.69bn for enforcement expenses, and more.

Nasarawa’s non-salary spending as of Q3, 2023, was ₦28.13bn, Niger expended ₦23.43bn (as of Q2), Ogun utilized ₦49.27bn (as of Q2), Ondo spent ₦59.70bn, Osun allocated ₦42.59bn, Oyo’s expenditure was ₦24.52bn, Plateau’s spending reached ₦7.99bn as of Q2, Rivers expended ₦51.96bn (as of Q2), Sokoto allocated ₦20.89bn, Taraba’s spending was ₦24.73bn, Yobe utilized ₦25.07bn (as of Q2, 2023), and Zamfara’s non-salary expenditure was ₦29.14bn.

In total, states spent ₦4.59tn during the reviewed period, which includes capital expenditure. There is a concern that states might need to reach their 2022 spending level of ₦8.2tn due to reduced revenues and macroeconomic challenges. Additionally, there is growing apprehension about states allocating significant funds to what are perceived as irrelevant items.

The allocation and utilization of government funds have become a focal point of heightened scrutiny, particularly in light of the country’s escalating economic challenges.

Notably, Naija News reported that the governorship candidate of the Action Democratic Congress in Lagos, Funso Doherty, had raised concerns about the expenditure practices of Lagos State.

This critique has sparked a significant public outcry, underscoring the growing attention and demand for transparency in the management of public finances.

In a letter to the government, he wrote, “I have had the opportunity to go through the register of public procurement awards by LASG, its ministries, and Department Agencies for the second and third quarters of 2023, as reported by the Public Procurement Agency.

“This attached schedule highlights selected awards which, in my opinion, require greater scrutiny.”

During the period under examination, state governments escalated their borrowing activities, reaching a total of ₦988.48bn. This borrowing was primarily intended to supplement their allocations from the Federation Account Allocation Committee (FAAC) and internally generated revenue.

Among the states, 29 currently carry a debt burden of ₦536.01bn owed to financial institutions and other government enterprises.

Additionally, borrowings from both short and long-term arrangements with multilateral lenders, including the World Bank, the International Monetary Fund, Afrexim, and the African Development Bank, increased to ₦452.47bn across 33 sub-national entities.

A noteworthy observation by The PUNCH highlighted that Lagos State held the highest domestic debt at ₦200bn, followed by Delta State with ₦70bn and Oyo State with ₦58.87bn.

Similarly, Delta State emerged as the leading borrower from multilateral lenders, amassing ₦71.45bn in debts. Lagos followed closely with ₦51.36bn, trailed by Akwa-Ibom with ₦27.04bn and Ogun with ₦22.82bn.

A recent report by The PUNCH disclosed that state governments collectively borrowed approximately ₦46.17bn from three banks to meet salary obligations between January and June 2023. This development further underscores the financial challenges faced by states, prompting them to resort to borrowing to fulfil essential financial commitments.

Borrowing for recurrent expenditures is a growing concern to economists. An economist and former Vice-Chancellor of the University of Uyo, Prof Akpan Ekpo, recently told the newspaper “The situation is bad, but most states do not have enough in terms of internally generated revenue. Many states, even their federal government allocation, cannot pay salaries, which is very dangerous. You should not borrow to pay salaries.

“You should borrow to finance capital projects. States have to think of new ways of increasing their IGRs. If they continue borrowing to pay salaries, it is not good for the economy.”

A development economist, Dr Aliyu Ilias, also said, “With the current hardship we have in the country, they may not have an alternative than to resort to borrowing. But borrowing to pay salaries is becoming a problem. We must stop borrowing for recurrent expenditure. We can borrow for capital expenditure; that is okay. The consequence is that we are digging ourselves into more trouble.”

Contrary to media reports, the Ondo State Government has rejected claims that Governor Rotimi Akeredolu expended ₦7.3bn without securing approval from the state House of Assembly.

The government’s denial aims to dispel any inaccuracies in the circulated information and affirm that proper approval procedures were adhered to in allocating and utilising the mentioned funds.

In a statement on Tuesday, the Chief Press Secretary to the governor, Richard Olatunde, said, “It is important to state unequivocally that the referenced ₦7.3bn constituted the cumulative amount of palliative funds received from the federal government.

“These funds were allocated under the contingency sub-heading to address unforeseen expenses not initially budgeted for but deemed necessary during the fiscal year.

“While the original contingency fund in the 2023 budget was ₦1.07bn, the additional ₦7bn represents funds received from the federal government labelled as ‘Infrastructure Support Fund,’ specifically for palliatives meant to cushion the effects of fuel subsidy removal.”