Anambra State, one of the most dynamic and economically promising states in southeastern Nigeria, has continued to make impressive strides in governance, public finance, and development planning. A significant part of this progress hinges on how the state receives, allocates, and utilizes its financial resources. Understanding the details of state allocation for Anambra provides insight into its development priorities, financial health, and long-term vision.
In this blog post, we’ll explore everything you need to know about state allocation for Anambra State—from the sources of revenue, budget priorities, and capital investments to fiscal reforms, transparency efforts, and future opportunities.
Overview of State Allocation in Nigeria
Before diving into Anambra State specifically, it's essential to understand how state allocation works in Nigeria.
State allocations in Nigeria are primarily determined by the Federation Account Allocation Committee (FAAC), which is responsible for sharing revenue among the federal, state, and local governments. The funds in this account come mainly from oil exports, Value Added Tax (VAT), customs duties, and other federally collected revenues.
The allocation formula considers several parameters, including population, landmass, social development needs, and internally generated revenue. This ensures that each state receives a share that reflects both its needs and contributions to the national economy.
Anambra State’s Revenue Composition
Anambra’s state allocation is made up of various revenue streams. The major sources include statutory allocations, VAT, and Internally Generated Revenue (IGR). Let’s break these down:
1. Statutory Allocations
Statutory allocations from the federal government form a core part of Anambra's revenue. In the 2024 fiscal year, the state received a total of ₦76.7 billion as statutory allocation. This figure highlights the state’s reliance on the central government to finance key areas of governance and development.
2. Value Added Tax (VAT)
Another major revenue stream is VAT, which is shared among the three tiers of government. In 2024, Anambra State received ₦58.5 billion from VAT. This was crucial in supporting government services and capital development, especially in the face of fluctuating oil revenues.
3. Internally Generated Revenue (IGR)
Anambra is making substantial efforts to become more financially self-reliant. In 2024, the state recorded ₦50.1 billion in IGR. These revenues were sourced from taxes, levies, fees, licenses, and other non-oil income streams. The increase in IGR reflects ongoing reforms in tax collection, expansion of the tax base, and improved financial management.
The Anambra State Budget: 2024 and 2025
Anambra’s annual budget is a key indicator of how state allocations are planned and executed.
2024 Budget
The 2024 approved budget for Anambra State was ₦410.13 billion. A striking feature of this budget was the emphasis on capital development, with 73.5% (₦301.7 billion) earmarked for capital projects and 26.5% (₦108.3 billion) for recurrent expenditure. This budget structure underlined the state's focus on infrastructure, education, health, and economic growth.
2025 Budget – Changing Gears 2.0
In 2025, the state proposed a more ambitious budget of ₦606.99 billion—a 48% increase from the 2024 figure. Dubbed “Changing Gears 2.0,” this budget was anchored on rapid infrastructure growth, economic transformation, job creation, and poverty alleviation.
Out of the total budget, ₦467.5 billion (77%) was allocated for capital expenditure, while ₦139.5 billion (23%) was planned for recurrent expenses. This budgetary orientation reaffirmed the government's long-term strategy to improve the quality of life for its citizens through strategic investment in physical and social infrastructure.
Sectoral Allocation Breakdown
Anambra's budget allocations reflect its development priorities. Here’s how some of the funds were distributed across sectors in 2025:
1. Infrastructure and Roads
The government earmarked a massive ₦200 billion for road construction and maintenance projects. This investment aims to connect urban and rural areas, boost trade, reduce travel time, and create jobs.
2. Healthcare
The healthcare sector received ₦1 billion for upgrading the Chukwuemeka Odumegwu Ojukwu Teaching Hospital and another ₦5 billion for constructing a modern cancer treatment center. These projects are expected to enhance healthcare access and outcomes.
3. Environment and Climate Resilience
To combat erosion and flooding, ₦2 billion was allocated to the Anambra State Erosion, Watershed, and Climate Change Agency. The investment is aimed at improving climate resilience and protecting communities from environmental disasters.
Fiscal Strategy and Economic Reforms
Anambra State has adopted forward-thinking fiscal strategies to reduce its dependency on federal allocations and build a more resilient economy.
1. Debt Sustainability
The state government has published debt sustainability and management strategies, showing a firm commitment to prudent borrowing and responsible fiscal governance. These documents outline the state’s approach to maintaining a healthy debt-to-revenue ratio and planning long-term repayment.
2. IGR Expansion Strategy
To reduce its fiscal dependence, the state is expanding its IGR base through better enforcement of tax compliance, digital tax collection, and the registration of more businesses and citizens into the tax net.
3. Advocacy for a New Revenue Allocation Formula
Anambra has also been vocal in national discussions on revising the revenue sharing formula. Former Governor Willie Obiano once proposed that states receive 50% of the total revenue, with local governments getting 30%, and the federal government retaining 20%. The logic is simple: states are closer to the people and better positioned to address grassroots development challenges.
Transparency and Accountability
A notable highlight of Anambra’s financial governance is its commitment to transparency. The state regularly publishes:
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Budget estimates
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Quarterly budget performance reports
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Mid-year and full-year financial statements
This open-data approach enables public scrutiny, strengthens accountability, and builds citizen trust in government. For example, the Q3 2024 budget performance report is publicly available for review on the state's website.
Challenges Facing State Allocation in Anambra
Despite these achievements, Anambra State continues to face several challenges in managing its allocations effectively:
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Funding Delays: Some ministries and agencies experienced zero funding for key projects in the first two quarters of 2024, hindering service delivery and implementation timelines.
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Revenue Volatility: The state’s statutory allocation is still vulnerable to fluctuations in global oil prices and economic shocks.
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Overhead Costs: Like many Nigerian states, Anambra spends a sizable chunk of its recurrent expenditure on salaries and administrative costs.
Opportunities for Growth
Despite the challenges, Anambra State is well-positioned to capitalize on several opportunities:
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Public-Private Partnerships (PPPs): The state can leverage private investments to finance key infrastructure projects.
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Diaspora Investment: With a large and successful diaspora population, the state can attract investments into real estate, agriculture, and manufacturing.
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Digital Economy: By investing in ICT infrastructure and digital services, Anambra can grow its tech ecosystem and create thousands of jobs.
Conclusion
Anambra State’s approach to managing its allocations reflects a forward-thinking and development-driven mindset. By focusing on infrastructure, healthcare, environmental sustainability, and fiscal reforms, the state is laying a solid foundation for economic growth and improved living standards.
As the state continues to enhance its internally generated revenue and push for greater autonomy through a revised revenue allocation formula, the future looks bright for the residents of Anambra. With strong leadership, accountability, and public support, Anambra State is set to become a model for fiscal governance and sustainable development in Nigeria.
