Ripplesmetrics: In the river, dependence on FAAC encourages budget preparation rather than IGR (Section 2)

Among the crisis that shook the Siminaayi Fubara administration that had become a budget presentation, financial allocations that encourage government spending in one fiscal year. Budget presentations are prepared by the executive and presented to the legislature to debate before being signed into law.

However, in the last two years, the presentation cycle has not been smooth, especially with accompanying and confrontation between the two government arms. For example, the governor signed the N800 billion 2024 budget to be a law, almost 24 hours after it was given to four assemblies to be approved after the dispute between the governor and 27 parliament members in the court.

In 2025, the same movement was repeated with the governor who presented N1.88 trillion to the three -legislative team.

This report looks into the budget socioeconomic data, federal allocation and revenue making for many years at Rivers State.

Financial dependence

New Budget Data -Newly strengthens Rivers’s state finance dependence on federal allocation. Data reveals that the income generated internally (IGR) has struggled to compensate for the needs of state expenditure. These figures highlighted significant dependence on the disbursement of the Federal Account Allocation Committee (FAAC) to fund the state budget for years.

According to financial data, the Rivers State budget has experienced a sharp increase from the N448.66 billion in 2021 to the N800 billion record in 2024. However, while the budget is almost doubled, the IGR has not experienced the same growth. In 2023, for example, the state had an IGR N195.41 billion, while the FAAC allocation was established in N318.66 billion – showed that the state was very dependent on federal funds to meet its budget obligations.

Also read: Rivers: Iba ignores the court orders, appointing the administrator for 23 LGA

Faac; Dominant income
The trend of high FAAC dependence is proven over the past few years. In 2024, Rivers State received N385.66 billion from the FAAC, but the IGR number was still not disclosed. Considering the pattern of state income, it is clear that internal income alone will not be enough to fund even half of the state expenditure.

In 2022, the allocation of Rivers’s state FAAC was established in the N270.54 billion, with IGR N172.82 billion. While this shows several levels of internal income efforts, the gap between FAAC and IGR remains quite large.

Despite being the main commercial center in Delta Niger, the international income flow of the Rivers state has failed to grow along with the demands of the budget. Stagnation in IGR shows structural challenges, including low business tax efficiency, limited investment in the non-oil sector, and excessive dependence on federal funds.

While the FAAC allocation provides short -term buffer, they are not a means of sustainable economic growth. Fluctuations of global oil prices and changes in the formula for the distribution of federal income can lead to long -term risks in the stability of the Rivers state financial stability.

For example, in 2023 when Fubara came to power, the domestic debt of the state was N225.5 billion and external debt of $ 87.1 million in 2022. In the latest data from the debt management office, external debt has dropped to $ 83.96 million while domestic debt has not been updated.

The expansion of the State Budget of the Rivers for many years has not been matched by an increase in proportional in the revenue generated internally, highlighting the urgent needs for fiscal reform. The current trend of FAAC’s dependence is not sustainable in the long run, and the state government must prioritize policies that promote economic self -sufficiency and long -term financial stability.

By: James Odunayo

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