Cross River State, located in Nigeria’s South-South region, is known for its rich natural resources, tourism potential, and vibrant cultural heritage. Over the years, the state government has increasingly focused on leveraging fiscal planning and public financial management to stimulate economic growth and improve the lives of its citizens.
Understanding how Cross River State receives, allocates, and utilizes public funds is crucial to evaluating its progress and identifying opportunities for improvement. This comprehensive blog post breaks down the state's revenue streams, budget allocations for 2024 and 2025, sectoral funding priorities, fiscal reforms, challenges, and the road ahead.
A Brief Look at How State Allocation Works in Nigeria
In Nigeria, all three tiers of government—federal, state, and local—receive allocations from the Federation Account Allocation Committee (FAAC). The funds disbursed are generated primarily through oil revenue, Value Added Tax (VAT), customs and excise duties, and other federally collected revenues.
Each state receives its allocation based on a revenue sharing formula that factors in population, land mass, IGR performance, and social development needs. This system aims to ensure equitable distribution and financial support across the federation.
Revenue Profile of Cross River State
Cross River’s public finance structure consists of three major sources:
1. Statutory Allocations
These are monthly disbursements from the federal government through FAAC. They remain the most significant funding source for the state. These funds help in paying salaries, funding projects, and delivering basic services.
2. Internally Generated Revenue (IGR)
The Cross River Internal Revenue Service (CRIRS) is responsible for collecting taxes and levies within the state. In recent years, the agency has been repositioned to improve efficiency, expand the tax base, and raise more non-oil revenues.
In 2024, the state set an ambitious goal to increase its IGR by 21%, aiming to reduce its reliance on FAAC disbursements and enhance financial independence.
3. Grants, Loans, and Other Inflows
The state also receives occasional development grants, domestic loans, and foreign-assisted credits to support infrastructure, education, health, and other capital projects.
The 2024 Budget: A “People First” Approach
Governor Bassey Otu presented the 2024 budget tagged “People First”, which amounted to ₦296.985 billion. The budget focused on meeting the social needs of vulnerable citizens while also addressing developmental priorities.
Key Features:
-
Capital Expenditure: ₦180 billion (60.6%)
-
Recurrent Expenditure: ₦116 billion (39.4%)
This distribution showed a capital-focused budget, reflecting the administration's emphasis on job creation, infrastructure development, and service delivery. It also integrated climate change strategies and gender-responsive allocations, making it inclusive and forward-looking.
Governor Otu highlighted that the budget was a “people’s budget,” geared towards lifting the vulnerable, empowering youth and women, and enhancing living standards through social investments and economic empowerment.
The 2025 Budget: “Budget of Sustainable Growth”
Cross River took a leap forward in 2025 with a budget tagged the “Budget of Sustainable Growth.” Signed into law in December 2024, the budget totaled ₦538.5 billion, marking an increase of over 80% from the previous year.
Breakdown:
-
Capital Expenditure: ₦328 billion (66%)
-
Recurrent Expenditure: ₦170 billion (34%)
Governor Otu described the 2025 budget as a continuation of the administration’s transformative agenda. The funds were allocated strategically to accelerate development, boost local production, and modernize infrastructure.
Sectoral Allocation for 2025
The 2025 budget was designed with targeted sectoral allocations to drive inclusive growth and development. Below is a breakdown of how the state planned to allocate funds:
-
Infrastructure: ₦100 billion
Roads, urban renewal projects, and rural electrification top this list, aiming to enhance connectivity and reduce transportation bottlenecks. -
Education: ₦81 billion
Focused on revamping schools, improving teacher training, and increasing access to quality education, especially in rural areas. -
Health: ₦25 billion
Upgrades to general hospitals, construction of new primary health centers, and provision of medical equipment and drugs. -
Judiciary: ₦20 billion
Strengthening legal infrastructure and expanding access to justice. -
Cross River House of Assembly: ₦18 billion
For legislative functions, staff welfare, and administrative reforms. -
Aviation: ₦16 billion
Targeted at completing the Obudu International Cargo Airport and enhancing logistics infrastructure. -
Special Duties & Intergovernmental Affairs: ₦15 billion
-
Power Sector: ₦14 billion
Investment in solar and mini-grid projects to tackle energy poverty. -
Tourism: ₦5 billion
Revitalizing the tourism sector through events like the Calabar Carnival and eco-tourism development. -
Science, Technology, and Innovation: ₦4.7 billion
Aimed at digital transformation and youth-driven innovations. -
Women Affairs: ₦3.7 billion
Supporting women empowerment programs, especially in rural communities. -
Information and Civic Engagement: ₦3 billion
Enhancing public communication and government transparency. -
Others: ₦181.6 billion
This includes environment, agriculture, youth development, transport, and civil service reforms.
Debt Servicing and Financial Discipline
To ensure fiscal sustainability, the 2025 budget allocated ₦50 billion for debt servicing. This was a strategic move to manage the state’s liabilities and maintain a healthy debt-to-revenue ratio.
Cross River State, like many Nigerian states, has had to grapple with mounting debts. Governor Otu’s administration has committed to prudent borrowing, ensuring that all new loans are tied to income-generating projects with long-term value.
Fiscal Reforms and Economic Strategy
The current administration has implemented several reforms to reposition Cross River’s economy:
1. Rejuvenating the CRIRS
Efforts are ongoing to digitize the revenue system, enforce compliance, and widen the tax base. Every taxable adult is being brought into the tax net, and CRIRS is expected to double its revenue performance from 2024.
2. Public-Private Partnerships (PPPs)
The state is increasingly opening up to private sector participation in infrastructure, agriculture, and tourism development. This model helps reduce the burden on public finances while attracting technical expertise and capital.
3. Transparency and Open Governance
Cross River publishes its budget details, mid-year reviews, and quarterly performance reports to foster accountability and citizen engagement. This approach helps build trust and aligns with global best practices in public financial management.
Challenges Facing Cross River State
Despite notable progress, Cross River faces several challenges:
-
High Recurrent Costs: The state still spends a significant portion of its revenue on salaries and running costs.
-
Low IGR Base: Although improving, the IGR contribution is still small compared to the state’s needs.
-
Infrastructure Gaps: Many rural communities remain cut off from development due to poor road access and inadequate utilities.
-
Federal Dependency: Heavy reliance on federal allocations makes the state vulnerable to oil price shocks and national economic instability.
The Road Ahead
To unlock its full potential, Cross River State must:
-
Deepen reforms in tax collection and administration.
-
Leverage the diaspora community for investments.
-
Diversify its economy through agriculture, ICT, and manufacturing.
-
Invest in youth employment and skills development.
The 2025 budget provides a strong platform for these goals, with allocations that reflect a strategic and inclusive development agenda.
Conclusion
Cross River State’s approach to public finance—from budget formulation to allocation and performance monitoring—demonstrates a commitment to good governance and sustainable development. With the 2024 and 2025 budgets focusing on infrastructure, education, healthcare, and innovation, the state is on a path to economic transformation.
Through strategic fiscal reforms, increased internal revenue generation, and transparency, Cross River can reduce dependence on federal allocations and build a more resilient and inclusive economy for all its citizens.
