At least 26 states, including Osun, could not generate enough Internally Generated Revenue to pay salaries in 2025 and relied heavily on FAAC allocations.
According to BudgIT’s report, only 8 of 34 states generated IGR higher than their personnel costs.
The states are Lagos, Enugu, Ogun, Delta, Kaduna, Kwara, Abia and Anambra.
The other 26 states generated N1.16tn internally but spent N1.91tn on personnel, leaving a N747bn deficit.
For Osun, IGR stood at N58.80bn while personnel expenditure was N87.46bn, leaving a shortfall of N28.66bn.
BudgIT noted that despite a 232% jump in FAAC allocations to N11.38tn in 2025, states’ dependence on federal transfers actually increased. FAAC accounted for 73.3% of state revenue, up from 68.7% in 2022, while IGR’s share dropped to 26.7%.
The report warned that improving domestic revenue mobilisation is critical to reduce reliance on federal transfers and ensure long-term fiscal sustainability.
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