Small Money Matters Too: A Quick Analysis of Ikorodu LG’s 2019 and 2020 Spendings

Ayomide Ladipo | March 03, 2022

Local governments in Nigeria, the third tier of government, have received a cumulative of N15.5 trillion in Federation Account Allocation Committee (FAAC) allocations over the last 12 years; this excludes public funds they generate locally through internally generated revenue from tenement rates and other taxes they are allowed to collect by the constitution.

In Nigeria’s quest to achieve openness and accountability across all tiers of government, only the federal and state administrations have received attention, with a minimal spotlight on the local governments. Some argue that this is so because the local governments are just placeholders by the state governments and have no absolute autonomy over the affairs of their jurisdiction.

However, local Government transparency and accountability is key to ensuring equitable development at the grassroots. In our mission to achieve this, we are currently engaging LGAs in Lagos to open their

budgets to the public and publish timely budget implementation reports. We retrieved Ikorodu West LCDA 2019 and 2020 budgets and report the findings.

For 2020, Ikorodu West’s total expenditure budget was 1.35bn, out of which 1.07bn was allocated to the recurrent budget while N284.47m. This shows that 79% of the total expenditure was allocated to recurrent spending, and only 21% went to capital expenditure.

In much simpler terms, if Ikorodu West was spending N1,000 in 2020, N790 of it would pay salaries and administrative costs, while N210 would go to the development of the LCDA.

This means that Ikorodu West LCDA is prioritising operating expenses over infrastructural expenses, therefore human development in the LCDA will suffer. The ratio of recurrent to capital spending is

The total expected revenue was 1.35bn, with 80% of this revenue coming from the Federal government via Federal Allocations (FAAC) and Value Added Taxes (VAT). At the same time, the remaining N267m is shared between loans, State Generated and Own Internally Generated revenue.

In 2019, Ikorodu West projected a revenue of N1.63 billion, but at the end of the fiscal year, it only realised N388.07million. That is barely 23% of the projected revenue. From data gathered, this drastic performance was caused by a 78% slash in the expected revenue from the Federal Allocations. However, it is worthy to note that the LCDA performed relatively well in terms of Internally Generated Revenue as they realised 75% of their projection.

The total expenditure amounted to N941m, of which 89% went into recurrent expenses while a meagre 11% was spent on capital expenses. Of the N847m recurrent expenditure, N291m was spent on overheads while N281m was spent on teachers’ salaries. This indicates that only the teachers’ salaries are more than 3x the capital expenditure.

While this blatant disregard for capital projects by Ikordu West LCDA is something to worry about, there is a bigger question. The total revenue for 2019 was N388bn, while the total expenditure was N941m. This leaves us with a deficit of N553m, which was not explained anywhere in the budget data released.

The Big Question is: Where did the N553m deficit come from? Who funded it?

Lack of access to information on the dispensation of public funds, opaque government activities and non-accountable practices contributes to underdevelopment in Nigeria. Citizens are subjected to only a perception of what the government is spending each year because of the disconnect between the citizens and their government.

Do you have information about your LGA/LCDA budget? Send us a mail at [email protected] and we’ll take it up. The grassroots government needs to do better with their finances and responsibility, and this task lies in our hands.

Acronyms

LGA – Local Government Area
LCDA – Local Council Development Area

FAAC – Federal Allocations

VAT – Value Added Taxes
NCA – Non-Current Assets
SSE – Social Services Expenses