By Ovasa Ogaga,
The proposed Delta State 2025 N936 billion budgets, unveiled by Governor Sheriff Oborevwori has been met with sharp criticism for its perceived lack of innovation and failure to address fundamental economic challenges.
Despite being termed a "Budget of Fiscal Consolidation," analysts and stakeholders, including the New Delta Coalition (NDC), have expressed concerns about its heavy reliance on federal allocations and lack of robust measures to boost Internally Generated Revenue (IGR).
The New Delta Coalition, in a statement signed by its Convener, Mr Godwin Anaughe, tagged the budget as a continuation of the “collect FAAC and spend” approach, which they argued has stifled the state's economic growth.
The coalition noted that while Governor Oborevwori claims to have reduced the state's debt stock, the increase in FAAC revenue due to federal economic reforms led by President Bola Ahmed Tinubu’s administration is the primary reason for the improved fiscal outlook, not innovative financial management by the state government.
A key concern raised by the coalition is the steady decline in IGR contributions to the state’s budget. From 17.35% in 2023 to a projected 15% in 2025, stressing that this downward trend highlights challenges in the state’s revenue collection system.
The statement reads in part: “The proposed budget's over-reliance on FAAC allocations raises serious concerns about Delta State's economic sustainability. By failing to substantially diversify revenue streams and move beyond oil and gas, the government reinforces a harmful dependency on federal allocations. This approach has historically stifled development, and a decline in FAAC allocations would leave the government struggling to fund its projects. Without a clear plan for sustainable economic growth, the state's financial future hangs in the balance.
“Delta State's alarmingly low Internally Generated Revenue (IGR) of N140 billion raises red flags about its long-term financial stability and economic growth potential. The 2025 budget lacks concrete measures to address IGR challenges, unlike states like Lagos, Rivers, and Ogun, which have achieved impressive IGR figures.
“Governor Oborevwori's administration is facing significant challenges with its Internally Generated Revenue (IGR) contribution to the budget. The IGR contribution has dropped from 17.35% in 2023 to 16.35% in 2024 and is projected to decline further to 15% in the new budget. This downward trend raises concerns about financial management and economic growth.
“The current revenue collection system, established during Okowa's tenure, relies heavily on party chieftains acting as consultants, collecting revenue and remitting a percentage to the government. This approach has failed to yield substantial IGR growth, sparking worries about revenue leakages due to inefficiency, underreporting, and fraud.
“The low Internally Generated Revenue (IGR) also indicates successive administrations' failure to drive economic growth and diversification by exploring alternative revenue streams beyond oil and gas. This lack of self-sustenance undermines the state's economic potential.
“Delta State's rich natural resources, including crude oil and natural gas, remain largely untapped. Agriculture substantially contributes to the state's economy, with oil palm, yam, and cassava crops being major produce.
“The state's failure to harness its tourism potential, despite boasting beautiful landscapes and cultural attractions, is a missed opportunity for revenue generation. The absence of a robust manufacturing sector and inadequate infrastructure stifles economic growth.
Though the budget prioritizes these sectors, budgetary allocations are inadequate.
“Delta State's 2025 budget falls short of being a true Budget of Fiscal Consolidation due to its lack of a clear roadmap to reduce dependence on Federal Accounts Allocation Committee (FAAC) revenue and boost Internally Generated Revenue (IGR). It's like building a house of cards, vulnerable to collapse at any moment.
“To achieve fiscal consolidation and foster meaningful development, the government must adopt a multi-faceted approach. This involves exploring alternative revenue sources beyond FAAC, ensuring transparency in revenue collection, tackling underreporting and fraud, and bolstering IGR through strategic investments in vital sectors.”
The NDC called on Governor Oborevwori to adopt a bold and multi-faceted strategy to address the state’s economic challenges. This includes leveraging federal economic reforms to promote agriculture and energy investments, reforming the revenue collection system to eliminate inefficiencies, and prioritizing strategic investments in infrastructure, tourism, and manufacturing.
The coalition emphasized that only by implementing these reforms can Delta State reduce its dependence on federal allocations, create sustainable private sector jobs, and secure long-term economic stability.
