Akwa Ibom State, located in the oil-rich Niger Delta region of Nigeria, is one of the most economically significant states in the country. This is primarily due to its vast oil and gas reserves, which not only contribute immensely to the national economy but also ensure that the state enjoys significant allocations from the Federation Account Allocation Committee (FAAC). These allocations have a direct impact on the state’s development trajectory, enabling the government to undertake massive infrastructural, educational, healthcare, and economic empowerment projects.
In this comprehensive guide, we will explore everything you need to know about Akwa Ibom State’s allocation: how much it receives, the various revenue sources, budgetary allocations, performance records, and how these funds translate into visible developmental projects for the people of Akwa Ibom.
Understanding Nigeria’s Revenue Allocation Framework
Before delving into Akwa Ibom's specific figures, it's important to understand the general structure of revenue allocation in Nigeria. The Federation Account is the pool of all revenues collected by the federal government which is shared monthly among the federal, state, and local governments by the Federation Account Allocation Committee (FAAC).
The current revenue-sharing formula in Nigeria is as follows:
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Federal Government: 52.68%
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State Governments: 26.72%
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Local Governments: 20.60%
Apart from this general allocation, oil-producing states like Akwa Ibom benefit from an additional 13% derivation fund. This is a constitutional provision that grants oil-producing states an extra 13% of the revenue generated from natural resources within their territories. This principle was established to cushion the environmental, infrastructural, and social impacts of resource extraction in these areas.
Akwa Ibom’s Share from the Federation Account and Derivation Fund
Akwa Ibom is consistently one of the top three highest recipients of FAAC allocations due to its status as a major oil-producing state.
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In 2023, Akwa Ibom received a total of ₦380.1 billion, ranking it as the third-highest recipient in Nigeria, just behind Delta and Rivers states.
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In the first half of 2023 alone, the state received ₦70.01 billion, further underlining its significant economic standing among the states of the federation.
These allocations are split into various components:
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Statutory revenue
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Value Added Tax (VAT) allocations
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Exchange rate differentials
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13% derivation fund from oil and gas revenues
It is worthy to note that the 13% derivation fund remains a major boost to Akwa Ibom’s economy, ensuring that a good portion of oil-generated revenue directly flows into the state’s coffers.
Akwa Ibom’s 2024 Budget and Revenue Breakdown
Governor Umo Eno signed the 2024 Appropriation Bill into law, approving a robust budget of ₦849.97 billion. This ambitious budget focused on scaling up infrastructural development, human capital development, agriculture, and youth empowerment programs.
Later in the year, a supplementary budget of ₦350 billion was presented and approved by the Akwa Ibom State House of Assembly. This was necessitated by the need to accommodate additional developmental projects and strategic interventions in critical sectors of the economy.
Key highlights of the 2024 budget:
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Emphasis on capital projects including roads, health, education, and rural development.
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Increased investment in social programs targeting vulnerable populations.
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Expansion of programs supporting youth entrepreneurship, skills acquisition, and agriculture.
Projections and Revenue Plans for 2025
In line with its vision for sustainable development, Akwa Ibom State has proposed an even more ambitious budget for 2025, pegged at ₦955 billion. Of this, a significant ₦655 billion has been earmarked for capital expenditure, showing the government's commitment to infrastructural transformation.
Breakdown of the expected revenue sources:
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Recurrent revenue projection: ₦830 billion
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Internally Generated Revenue (IGR): ₦80 billion
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Statutory revenue from FAAC: ₦20 billion
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Derivation revenue (13%): ₦135 billion
These figures demonstrate the state’s dependence on both FAAC and derivation revenues, while also showing modest but strategic efforts to boost its IGR base.
Budget Performance and Transparency Efforts
Budget performance is one of the key indicators of a government’s effectiveness. In 2024, Akwa Ibom State recorded a budget performance of 79.1%, according to official reports from the state’s Ministry of Finance and Economic Development. This impressive figure underscores the state’s commitment to executing its financial plans and ensuring that funds are directed toward planned projects.
Akwa Ibom is also among the states that have consistently published their quarterly budget performance reports. These reports provide citizens with insights into how the budget is performing, ensuring transparency and accountability. The state’s commitment to open governance is commendable, as it allows citizens, stakeholders, and investors to track government spending and project execution.
Socio-Economic Impact of Allocations and Derivation Funds
An extensive study conducted between 2013 and 2022 highlighted the impact of revenue allocation and derivation funds on Akwa Ibom’s socio-economic landscape. The study found that:
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There has been significant improvement in infrastructural development, including the construction of roads, bridges, and public facilities.
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Healthcare delivery has improved with the establishment of several new general hospitals and the upgrading of existing ones.
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Educational infrastructure has been expanded, with new schools and renovation of existing structures.
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However, challenges still exist, particularly in ensuring equitable distribution of resources across all the 31 local government areas.
While the state has made tremendous progress, there is an ongoing need to balance development between urban centers and rural areas to reduce inequality and promote inclusive growth.
Conclusion
Akwa Ibom State’s fiscal health is largely bolstered by its status as an oil-producing state. The combination of FAAC allocations and the 13% derivation fund has given the state the financial strength to embark on massive developmental projects that have significantly improved the quality of life of its people.
The government's budgeting culture, focus on capital investment, and transparent reporting have contributed to the state's positive economic outlook. However, with global shifts in energy, falling oil prices, and the push for diversification, Akwa Ibom must also accelerate its efforts in growing its Internally Generated Revenue (IGR) by expanding into non-oil sectors like agriculture, tourism, and technology.
Moving forward, continued transparency, inclusive governance, and strategic investments will ensure that Akwa Ibom sustains its developmental gains and remains a leading state in Nigeria.
