A WikkiTimes review of the 2023 National Bureau of Statistics data has shown that Kano State received the sum of N125.7 billion as federation accounts allocation in 2023.
This is as the state received its highest figure in September, when N13.46 billion was disbursed to it. In April, the sum of N7.19 billion was received by the state, representing the lowest for the year.
A review of the budget performance documents of the state, shows that the money received from FAAC is equivalent to 81.6% of the total expenditure recorded by the state in the year. This is as N153.4 billion was spent in total for the 2023 fiscal year.
Asides FAAC allocation, the total independent revenue obtained by the state is only 22% of the year’s revenue posted.
Kano 2023 Budget Built Heavily Around FAAC Allocations
Kano is referred to as the Centre of Commerce in the country, despite its tendencies, the state budget is heavily built around FAAC allocations.
For instance, in 2023, while the sum of N242.1 billion was planned to be the total revenue of the state, N154.6 billion of the money was expected to be sourced from FAAC allocations.
This simply means that the state expected 63% of the money it planned to spend in 2023 to come from the federal government.
The same trend was recorded in 2022, when the state planned to earn 55% of its revenue from the federal government.
According to the NBS Labour statistics Kano State’s working age population stands at 7.2 million. However, only 2.8 million are in the workforce. Of the number in the workforce, 717,086 persons are unemployed.
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) also noted that Informal micro enterprises account for 36.9 percent of jobs in Kano State, and over 1.824 million micro enterprises are informal. That is, they are not incorporated nor are they registered for taxes.Direct assessment taxes are paid by self-employed persons.
Kano has been unable to largely capture its businesses to be part of the formal sector, as a larger percentage of businesses in the state are informal (meaning they are not formally registered), leaving them out of the tax net.
These statistics may reflect why the state budgeted as little as N1.790 billion as direct assessment tax revenue but still could only record 66.2% (N1.1 billion) of the earmarked revenue.
Kano needs to be Innovative on Revenue Generation – ED, Accountability Lab
The executive director of Accountability Lab, Odeh Friday, stated that there is a need for the state to be innovative in generation of revenue given its potentials and population.
He warned that reliance on FAAC as a source of revenue isn’t sustainable, also expressing worry on how such funds are managed.
“Given the population of Kano, there is a need for the state to find innovative ideas to generate revenue. We all know that relying on FAAC is not sustainable thus the need to look out for revenue generation ideas”. he noted.
