Imo State, along with 20 other states, is seeking loans totaling N1.65 trillion to fund their 2024 budget deficits.
This move comes despite a significant increase in allocations from the Federation Account Allocation Committee (FAAC) over the last year.
From June 2023 to June 2024, Imo State and other states, as well as local governments, received a total of N7.6 trillion from FAAC.
This increase is largely attributed to the removal of petrol subsidies by the federal government on May 29, 2023.
Despite this increase, Imo State and other states are projected to receive N5.54 trillion from FAAC this year, up from N3.3 trillion last year.
However, this revenue, combined with internally generated revenues, is still insufficient to meet their financial obligations.
The current revenue-sharing formula allocates 52.68% to the federal government, 26.72% to states, and 20.60% to local governments.
Imo State and other states are seeking loans to bridge the gap between their revenue and expenditure.
The move has raised concerns about the financial management of states and their ability to generate sufficient revenue to meet their obligations. The Supreme Court’s recent ruling granting financial autonomy to local governments may also impact the allocation of FAAC funds.
A breakdown of the states seeking loans are Adamawa State N68.46 billion, Anambra NN245.08 billion, Bauchi N59.08 billion, Bayelsa N64 billion, Benue N34.69 billion, Borno N41, 71 billion, Ebonyi N20.5 billion, Edo N42.71 billion, Ekiti N27.15 billion, Imo N271.34 billion