Ekiti State recorded the best budget performance among other southwest states of Nigeria by the end of the third quarter (Q3) of 2022. The state had a 94.9 per cent budget performance, having spent N71.71 billion of the stipulated N75.57 by the end of the third quarter.
Comparatively, at the end of the third quarter, Oyo and Ondo spent N161.74 billion and N106.53 billion. The figures represent 73.18 per cent for Oyo and 71.28 per cent for Ondo compared with the corresponding N221.03 billion and N149.46 billion pro rata by the end of Q3.
At the end of the third quarter, Ogun State spent N166.76 billion. This is 49.3 per cent of the corresponding N338.24 billion it should have spent at the end of Q3.
Lagos and Osun states spent N684.44 billion and N48.36 billion by the end of Q2 2022. This amount represents 77.86 per cent and 74.54 per cent respectively, of the N879.1 billion and N64.88 billion it should have spent by the end of Q2.
Southwest’s Regional Budget Appropriation
The six states appropriated a combined budget of N2.92 trillion as expenditure for the 2022 financial year. While Ekiti planned to spend N100.75 billion, Lagos N1.758 trillion, Ogun N450.99 billion, Osun planned to spend 199.28 billion, Ondo N129.79 billion, and Oyo N294.7 billion for the same year.
Dataphyte’s analysis of these expenditures shows that of the N784.3 billion that Ekiti, Ogun, Ondo, and Oyo states should have spent by Q3, only N506.75 billion was spent.
Budget implementation reports of the six states revealed Ekiti, Ogun, Ondo, and Oyo spent a total of N506.75 billion as of the third quarter of 2022. Likewise, Lagos and Osun states spent a total of N732.8 billion by the end of second quarter (Q2) 2022.
Conversely, the six states had a total revenue projection of N1.17 trillion with a cumulative budget deficit of N1.18 trillion for the year, as shown in the table below.
Analysis of each state’s revenue projections shows that Ekiti, Ogun, Ondo, and Oyo states were able to generate N409.77 billion out of the N422.31 billion pro rata revenue by the end of Q3 2022. This represents 97.03 per cent gross performance.
Lagos and Osun states were to generate N579.76 billion by the end of Q2. They collectively generated N481.56 billion, 83.06 per cent of the amount.
Federation Account Revenue vs. Internal Generated Revenue (IGR)
The Q3 revenue budget for Ekiti, Ogun, Ondo, and Oyo states was N422.31 billion. The breakdown shows that N210.67 billion will come from the federation account revenue and N211.63 billion from internal sources.
These states generated N409.77 billion in revenue, 97.03 per cent of the projected for the first three quarters. N277.97 billion of this amount came from the federation account revenue and N131.79 from IGR.
Lagos and Osun states had a first two-quarter revenue budget of N579.76 billion. N154.36 billion from the federation account and N425.41 billion from internal sources.
They generated N481.56 billion, 83.06 per cent of the amount. N137.42 billion came from the federation account revenue, and N344.14 billion was generated internally.
In the region, Lagos State and Ogun State are the only states with an IGR greater than their federation account revenue. The state intended to generate N407.67 billion internally and receive N128.13 from the federation account revenue by the end of Q2.
Ogun State budgeted N136.87 billion as its expected allocation from the federation account revenue and N201.37 billion to be generated internally by the end of Q3 2022.
The revenue breakdown of the other states in the region shows that by the end of Q3, Ekiti State planned to earn N37.34 billion from the federation account and N10.68 from internally generated revenue (IGR).
In the first three quarters, in Ondo State, N51.08 billion was expected from the federation account and N23.21 to come from sources within the state.
Osun State expected N26.23 billion from the federation account and N17.74 billion from internal sources by the end of Q2 2022. While Oyo State planned to raise N57.61 billion internally and receive N67.5 billion from the federation account by the end of Q3 2022.
Details of the region’s internally generated revenue (IGR) show that only Lagos and Ogun states had an IGR composition of 76.09 per cent and 68.69 per cent of total revenue. That of the other states ranges from 22.24 per cent in Ekiti State to 46.05 per cent in Oyo State.
However, the IGR performance of the states showed that apart from Oyo State, which recorded a 49.9 per cent performance by the end of Q3, the other states recorded a performance from 77 per cent to 87 per cent.
Ekiti State generated N9.13 billion of its approved N10.68 billion, showing an 85.49 per cent performance as of Q3. The performance rate was 81.06 per cent in Lagos State at the end of Q2. It generated N330.45 billion from its approved N407.67 billion.
In Ogun State, N120.13 billion was budgeted, out of which the state generated N73.74 billion. This represents 61.38 per cent IGR performance by the end of Q3 2022.
The performance of Ondo states was 86.92 per cent as they budgeted N23.21 billion and generated N20.17 billion. Osun and Oyo states performed at 77.26 per cent and 49.91 per cent, respectively.
Recurrent vs. Capital Expenditure
Ekiti, Ogun, Ondo, and Oyo states had a first three-quarters budget of N784.3 billion. N411.9 billion is for capital expenditures, and N372.59 is for recurrent. They, however, spent N506.75 billion, 64.61 per cent of the expenditure for the period. N333.37 billion was spent on recurrent expenditure and N173.38 billion on capital expenditure.
Lagos and Osun states budgeted N943.98 to be spent by the end of the first half of 2022. The breakdown shows that N621.39 goes to capital expenditure and N322.59 to recurrent expenditure.
N732.8 billion, 77.63 per cent of the budget was spent. N454.49 (73.14 per cent of capital expenditure) was spent on capital expenditure, and N278.3 (86.27 per cent of recurrent) went to recurrent expenditure.
The expenditure composition showed that most of the money went to capital expenditure. Four states had a greater capital expenditure composition in the region. Lagos, Ogun, Osun, and Oyo budgeted 66 per cent, 60 per cent, 58 per cent, and 52 per cent of their expenditure on capital items.
The other states, Ekiti and Ondo states, had 40 per cent and 43 per cent of their budget, respectively, to capital expenditure.
State analysis shows that most of the capital expenditure for the period came from Lagos State, as the state is the only state with a greater capital expenditure composition. The state spent 63 per cent of its N684.44 billion on capital items.
Other states’ capital expenditures were 20 per cent in Ekiti State, 37 per cent in Ogun State, 30 per cent in Ondo State, 46 per cent in Osun State, and 41 per cent in Oyo State.
Thus, while four states budgeted over 50 per cent of their expenditure on capital items in the southwest region, only one state implemented over 50 per cent of its spending on capital expenditure.