Kebbi State, located in Nigeria's northwestern region, is known for its agricultural prowess, cultural heritage, and strategic riverine landscape. Despite these advantages, the state continues to face critical developmental challenges that hinge largely on how it manages and deploys its financial resources, particularly allocations received from the Federation Account Allocation Committee (FAAC).
This blog post offers an in-depth analysis of Kebbi State's financial structure, detailing the FAAC allocations, internally generated revenue (IGR), 2024 budget expectations, fiscal performance, key developmental priorities, and the long-term strategies for sustainability.
Understanding Nigeria's Revenue Allocation System and FAAC
To fully understand Kebbi State’s allocation, it is vital to grasp the basics of Nigeria’s revenue-sharing formula. The Federation Account serves as a central pool into which revenues from oil sales, taxes, customs, and other federally collected earnings are deposited.
Every month, these funds are distributed by the Federation Account Allocation Committee (FAAC) among the three tiers of government—federal, states, and local governments. The distribution formula currently stands at:
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52.68% for the Federal Government
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26.72% for the 36 States
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20.60% for the 774 Local Governments
Additionally, oil-producing states receive 13% derivation funds from the oil revenues for the exploitation of natural resources within their territories.
Kebbi, being a non-oil-producing state, does not benefit from the 13% derivation fund, making it reliant on its FAAC allocation and internal revenue sources.
Kebbi State’s FAAC Allocation Performance
In 2023, Kebbi State received a total of ₦102.87 billion from the FAAC. This figure positioned it as the 28th state in the ranking of highest federal allocations among the 36 states.
Notably, this allocation made up 77.87% of the state’s entire revenue for the year, indicating a high dependency on federal allocations. The heavy reliance on FAAC allocations exposes the state to national economic fluctuations, particularly those tied to global oil markets and federal tax collections.
This financial reality has placed pressure on the state government to seek innovative solutions to improve its internally generated revenue base and reduce its dependence on FAAC.
Kebbi State 2024 Budget: The Budget of Fulfillment
In line with its developmental agenda, the Kebbi State government proposed a ₦248.5 billion budget for the 2024 fiscal year, tagged the “Budget of Fulfillment.”
According to Governor Nasir Idris, the budget is focused on enhancing the welfare of citizens, boosting agriculture, providing critical infrastructure, and supporting education, healthcare, and social development.
Revenue Projections for 2024
The 2024 budget is expected to be funded through multiple revenue sources:
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FAAC Allocations: Estimated to maintain a significant share of the total revenue.
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IGR: The state government has targeted an increase in IGR by modernizing tax collection systems and exploring new revenue channels.
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Grants, Aids, and Special Funds: From international donors, federal interventions, and development agencies.
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Loans and Credit Facilities: To finance specific capital projects, particularly in infrastructure and agriculture.
Budget Expenditure Breakdown
The budget is heavily capital expenditure-driven, signifying the state's intention to invest massively in physical and socio-economic infrastructure.
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Capital Expenditure: Over ₦160 billion (approximately 65% of the total budget)
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Recurrent Expenditure: About ₦88 billion (approximately 35% of the total budget)
Key sectors of focus include:
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Agriculture and Food Security: Revamping the agricultural sector through mechanization, irrigation projects, and support for farmers.
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Infrastructure Development: Road construction, electrification, and urban renewal.
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Health and Education: Upgrading healthcare facilities, schools, and recruitment of essential staff.
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Youth and Women Empowerment: Implementation of empowerment programs, skill acquisition centers, and microfinance schemes.
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Security: Strengthening security architecture to protect lives, property, and investments.
Budget Implementation Strategy and Fiscal Discipline
To ensure that the budget objectives are met, the Kebbi State government has committed to maintaining fiscal discipline, transparency, and accountability in the management of public funds.
The state’s Quarterly Budget Performance Reports will continue to provide updates on the inflows, expenditure, and project execution, enabling stakeholders to monitor the implementation process.
Furthermore, the state government has strengthened its Treasury Single Account (TSA) system and enhanced its public procurement processes to promote efficiency and block leakages.
Key Developmental Projects Anchored on State Allocations
Agricultural Transformation
Given its agrarian nature, Kebbi State has launched several flagship programs to transform its agricultural value chains:
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Rice Production Expansion: Leveraging partnerships with the Central Bank of Nigeria (CBN) through the Anchor Borrowers Program.
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Irrigation Schemes: Revitalization of irrigation infrastructure at Argungu, Yauri, and Bagudo to promote all-year-round farming.
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Fisheries and Livestock: Support for fish farmers and the establishment of modern abattoirs.
Infrastructure Development
Kebbi State is focusing on connecting rural communities through:
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Construction and rehabilitation of over 200 kilometers of rural and urban roads.
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Expansion of rural electrification projects.
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Completion of housing estates for low-income earners.
Education and Health Interventions
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Upgrading Kebbi State University of Science and Technology and expanding access to quality education.
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Rehabilitation and equipping of general hospitals and primary health centers across the state.
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Implementation of maternal and child health programs.
Challenges Facing Kebbi State’s Fiscal Management
Despite the progress recorded, Kebbi State faces significant challenges:
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Heavy Dependence on FAAC: Over 77% reliance exposes the state to fiscal risks when federal revenue drops.
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Low IGR Performance: The state's IGR capacity remains limited due to its predominantly rural economy and narrow tax base.
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Infrastructure Gaps: Many communities lack access to basic infrastructure such as roads, water, and healthcare facilities.
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Security Threats: Banditry and farmer-herder conflicts continue to threaten agriculture and socio-economic activities.
Strategic Steps for Economic Diversification and Sustainability
In response to these challenges, Kebbi State is implementing several strategic interventions:
Enhancing Internally Generated Revenue (IGR)
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Broadening the tax base through informal sector inclusion.
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Introduction of electronic tax payment platforms.
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Encouraging investments in local industries, especially agro-processing and crafts.
Public-Private Partnerships (PPP)
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Leveraging PPP models to finance infrastructure projects.
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Attracting private investors to agriculture, tourism, and logistics sectors.
Economic Diversification Programs
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Development of agricultural industrial parks.
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Promotion of tourism through the annual Argungu Fishing Festival and other cultural events.
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Revitalization of mining and solid minerals sectors.
Governance and Public Financial Management Reforms
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Deepening transparency in budgeting and procurement.
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Institutionalizing performance-based budgeting frameworks.
Conclusion
Kebbi State’s fiscal architecture is largely underpinned by allocations from the Federation Account, yet the state government is aggressively pursuing measures to enhance internal revenues and attract investments. The 2024 Budget of Fulfillment is a reflection of the state’s ambition to bridge infrastructure deficits, support economic diversification, and enhance the living standards of its people.
While challenges remain, the political will demonstrated through fiscal discipline, accountability mechanisms, and development-focused projects positions Kebbi State on a trajectory towards sustainable growth, resilience, and self-sufficiency.
