Gombe State, often referred to as the "Jewel in the Savannah," is strategically located in the northeastern part of Nigeria. Despite being one of the smaller states in terms of landmass and resources, Gombe has consistently demonstrated resilience in managing its finances, leveraging its allocations from the Federation Account Allocation Committee (FAAC), and initiating innovative strategies to boost its internal revenue. This blog post explores the details of Gombe State’s allocations, the composition of its budget, the implications for development, and the key challenges and prospects ahead.
Understanding Nigeria’s Revenue Allocation System
To grasp how Gombe State receives its share of federal revenue, it's essential to understand Nigeria’s revenue allocation system. Nigeria operates a federal structure where revenue collected from taxes, oil sales, customs duties, and other federal income sources are pooled into the Federation Account.
This revenue is distributed monthly through the Federation Account Allocation Committee (FAAC). The current sharing formula for distributable revenue is as follows:
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52.68% to the Federal Government
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26.72% to the 36 State Governments
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20.60% to the 774 Local Government Areas (LGAs)
Additionally, oil-producing states receive an extra 13% derivation fund from oil revenue as compensation for their contribution to the federation’s oil income.
Since Gombe is not an oil-producing state, it does not benefit from the derivation fund. This fact makes it heavily dependent on its statutory share from the FAAC and emphasizes the need for economic diversification and internally generated revenue (IGR).
Gombe State’s FAAC Allocations: Where It Stands Nationally
In the 2023 fiscal year, Gombe State received a total of ₦99.05 billion from the FAAC. This made it the lowest-ranked state in terms of federal allocations among Nigeria’s 36 states and the Federal Capital Territory.
According to reports, this ₦99.05 billion accounted for 72.29% of the state’s total revenue in 2023, highlighting a significant reliance on federal allocations. This over-dependence is a concern for fiscal sustainability, prompting the state to strategize on boosting its internal revenues.
Gombe State 2024 Budget Overview: Budget of Continuity and Consolidation
Gombe State presented a ₦208.064 billion budget for the 2024 fiscal year, aptly named the “Budget of Continuity and Consolidation.” This budget demonstrates the state’s commitment to sustaining and building upon previous achievements in infrastructure, healthcare, education, and security.
Governor Muhammadu Inuwa Yahaya emphasized that the budget is designed to consolidate progress, especially in critical sectors like education, healthcare, and infrastructure development.
Revenue Projections for 2024
Gombe State plans to fund the ₦208.064 billion budget from multiple revenue streams:
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Statutory FAAC Allocations: Gombe expects to continue receiving its share from the FAAC, forming the largest part of its revenue.
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Internally Generated Revenue (IGR): Efforts are ongoing to enhance IGR through reforms in tax administration, digitization of revenue collection, and the diversification of the state's economy into agriculture, trade, and services.
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Grants and Aids: The state anticipates funds from international development partners, the federal government’s interventions, and humanitarian agencies.
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Loans and Credit Facilities: The state plans to access credit facilities to finance major capital projects that can stimulate economic growth.
Expenditure Priorities
The 2024 budget prioritizes capital expenditure, reflecting Gombe’s commitment to infrastructural development. Capital projects include road construction, healthcare facilities, educational institutions, and rural electrification.
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Capital Expenditure: ₦120 billion (approximate)
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Recurrent Expenditure: ₦88 billion (approximate)
Key sectors identified include:
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Infrastructure Development: Investment in roads, water supply, rural electrification, and urban renewal.
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Health: Construction and upgrade of hospitals, clinics, and rural health centers.
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Education: Rehabilitation of schools, provision of learning materials, and recruitment of teachers.
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Agriculture: Boosting food security through mechanized farming, agro-processing, and extension services.
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Youth Empowerment and Job Creation: Implementation of programs to enhance skills and entrepreneurship.
Budget Implementation: Performance and Accountability
Transparency and accountability have become pillars of Gombe’s governance model. The state regularly publishes quarterly Budget Performance Reports, which detail both revenue inflows and expenditure.
In the 2024 Q4 report, Gombe showed commendable performance in recurrent revenue collection and efficient management of operational expenses. However, capital project implementation faced challenges due to funding shortfalls, delays in federal transfers, and procedural bottlenecks.
Despite these hurdles, the state government maintained a steady pace in executing key infrastructural projects and social programs.
Socio-Economic Impact of State Allocations in Gombe
Gombe State’s effective deployment of its federal allocations and IGR has brought notable progress in several areas:
Infrastructure Development
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Over 150 kilometers of roads have been constructed or rehabilitated, boosting connectivity across LGAs.
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The Gombe Mega Motor Park and Gombe International Conference Center are nearing completion.
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Expansion of rural electrification projects has improved access to power in remote communities.
Healthcare Services
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Several primary healthcare centers have been revitalized.
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Investments in the State Specialist Hospital, Gombe, have improved tertiary healthcare services.
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The state launched vaccination campaigns and maternal health programs to reduce infant and maternal mortality rates.
Education
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Rehabilitation of over 200 schools and recruitment of teachers have improved enrollment and literacy rates.
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The Gombe State University of Science and Technology received additional funding to expand its programs and research capabilities.
Agricultural Development
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Initiatives like the Anchor Borrowers Program have supported thousands of farmers.
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Introduction of irrigation schemes to promote dry-season farming.
Youth and Women Empowerment
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Programs like Gombe Skills Acquisition Centers and microfinance support schemes have empowered youth and women with business skills and funding.
Challenges Facing Gombe State
Despite progress, Gombe faces persistent challenges that threaten its fiscal stability and socio-economic development:
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Over-dependence on FAAC: With over 70% of its revenue coming from federal allocations, Gombe remains vulnerable to national economic fluctuations.
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Infrastructure Deficit: Many rural communities still lack access to quality roads, water, healthcare, and schools.
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Security Concerns: Although relatively peaceful, Gombe faces spillover effects of insurgency from neighboring states.
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Low IGR Performance: Efforts to boost IGR have been hampered by low economic activities and a narrow tax base.
Strategic Pathways to Sustainability
To mitigate these challenges, the state government is adopting several strategies:
1. Enhancing IGR
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Revamping tax laws and administration.
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Encouraging investment in agriculture, trade, and industries.
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Digitalizing revenue collection processes.
2. Public-Private Partnerships (PPP)
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Attracting private investors to key sectors such as infrastructure, tourism, and education.
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Encouraging build-operate-transfer models for major projects.
3. Economic Diversification
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Prioritizing non-oil sectors like agriculture, manufacturing, mining, and ICT.
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Developing industrial clusters and agro-processing zones.
4. Capacity Building
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Training and reorienting civil servants to enhance service delivery.
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Strengthening public financial management systems.
Conclusion
Gombe State’s financial landscape is shaped largely by its share of the FAAC, with efforts underway to build a more resilient and diversified economy. While challenges such as low IGR, infrastructural deficits, and over-reliance on federal allocations remain, the state’s commitment to prudent budgeting, strategic investments, and fiscal discipline positions it for long-term growth and development.
Through innovative reforms, partnership building, and people-centered governance, Gombe State is setting the stage to transform from a predominantly agrarian state into a modern economic hub in northeastern Nigeria.
