Only Enugu, Lagos, 3 others can survive without FAAC allocations — BudgIT
By Maureen Aguta
A new report by BudgIT, a civic-tech organisation that tracks government spending and fiscal transparency, has ranked Enugu, Lagos, Abia, Anambra, and Kwara as Nigeria’s most financially viable states capable of surviving without monthly allocations from the Federation Accounts Allocation Committee (FAAC).
According to the 2025 State of States Report, Enugu State emerged as the most fiscally sustainable subnational government, capable of funding its operations almost entirely from Internally Generated Revenue (IGR). The report’s key metric — Index A — measures a state’s ability to meet recurrent expenditure obligations using only IGR, reflecting fiscal autonomy and long-term economic viability.
“States that perform strongly on Index A have comparatively limited dependence on FAAC allocations and thus possess greater viability if they were to theoretically exist as independent entities,” BudgIT stated.
Enugu Tops Fiscal Independence Chart
Enugu State led the 2025 ranking with a score of 0.68, meaning that 68 per cent of its IGR could sufficiently finance its operating expenses. Lagos followed closely with 0.83, while Abia, Anambra, and Kwara scored 1.56, 1.66, and 1.73, respectively.
This represents a major leap for Enugu, which was not among the top performers in the 2024 ranking dominated by Rivers, Lagos, Ogun, Anambra, and Cross River States.
The report attributed Enugu’s rapid fiscal transformation to sweeping reforms introduced by Governor Peter Mbah’s administration. Since taking office in May 2023, Mbah has grown the state’s IGR from ₦30 billion to ₦37 billion by the end of 2023, before expanding it dramatically to ₦180.05 billion in 2024.
The administration achieved this by deploying digital payment systems to block leakages, expanding the tax base, and automating revenue collection processes to curb evasion and corruption.
Fewer States Meeting Revenue Thresholds
BudgIT noted that the number of states capable of covering their recurrent expenditures through IGR alone declined in 2025 compared to the previous year.
In 2024, Rivers (121.26 per cent) and Lagos (118.39 per cent) were the only states generating more than enough IGR to fund their operations. However, Rivers dropped from this elite group in 2025, leaving only Lagos (120.87 per cent) and Enugu (146.68 per cent) as the two states exceeding the 100 per cent threshold.
The report also revealed that 28 states remain heavily dependent on FAAC allocations and other external inflows to sustain governance and public service delivery.
Strongest and Weakest IGR Growth
On Index A1, which tracks IGR growth momentum, Enugu again topped the national chart, followed by Bayelsa, Abia, Osun, and Kano. These states demonstrated the most robust improvements in revenue mobilisation during the 2024 fiscal year.
Conversely, Kebbi and Yobe recorded negative IGR growth, while Ebonyi, Bauchi, and Benue also posted weak performances. BudgIT observed that although overall fiscal performance improved compared to 2023 — when seven states posted negative growth — much of the current uptick could still be linked to increased inflows from federal sources rather than purely from internal reforms.
“While it may be too early to celebrate, the improvement in IGR performance across most states represents a significant step towards fiscal resilience,” the report concluded.
The 2025 State of States Report thus underscores Enugu’s emergence as Nigeria’s new benchmark for subnational fiscal independence — a position it attained through deliberate reform, technological innovation, and aggressive revenue expansion.