Enugu’s Fiscal Revolution: Why BudgIT Ranked Mbah’s State Most Likely To Survive Without FAAC

Through strategic revenue reforms, disciplined spending, and a historic $39.8 million debt reduction, Governor Peter Mbah has positioned Enugu as Nigeria’s most fiscally resilient state — capable of thriving without monthly federal allocations, writes Nseobong Okon-Ekong

In an unprecedented recognition of fiscal prudence and innovation in governance, civic-tech group BudgIT has adjudged Enugu State, under Governor Peter Mbah, as the most likely Nigerian state to survive without monthly allocations from the Federation Account Allocation Committee (FAAC).

The report, contained in BudgIT’s 2025 State of States publication, placed Enugu ahead of all other sub-national governments in the country for its strong internally generated revenue (IGR), prudent expenditure management, and an impressive record in debt reduction.

According to data released by the Debt Management Office (DMO) and analysed by StatisSense, Enugu State leads the 17 newly elected governors’ states in cutting down foreign debt — trimming it by a remarkable $39.8 million within one year.

This feat stands out at a time when many states are still increasing their external borrowing to finance recurrent expenditures. Mbah’s approach has been to curb unnecessary loans, strengthen fiscal transparency, and redirect savings into productive areas of the economy.

Reducing external debt eases repayment pressure, lowers long-term servicing costs, and boosts investor confidence — sending a strong signal that Enugu is committed to fiscal sustainability and not trapped in dependency.

IGR Growth: A Model of Internal Revenue Reform

BudgIT attributes Enugu’s ranking largely to its exceptional growth in internally generated revenue (IGR). When Mbah took office in May 2023, Enugu’s IGR stood at about N30 billion. By the end of 2023, it had risen to N37 billion, and by 2024, the figure had soared to N180 billion.

This leap was driven by comprehensive tax and revenue reforms. The Mbah administration introduced digital payment systems to plug leakages, expanded the tax net, and strengthened compliance across sectors.

BudgIT’s Index A — measuring a state’s ability to meet recurrent expenditure from IGR — placed Enugu’s score at 0.68, meaning the state can now fund 68 percent of its operations from its internal earnings alone.

That figure is far above the national average, where most states cover only 30–40 percent of their costs without FAAC inflows.

Smart Spending and Economic Vision

Governor Mbah’s fiscal revolution goes beyond revenue collection. His administration has demonstrated expenditure discipline, prioritising capital projects and infrastructure investment over routine administrative costs.

Enugu’s 2024 and 2025 budgets reflect a strategic shift toward productive spending, especially in energy, transportation, agriculture, and technology.

At the heart of this transformation is Mbah’s long-term vision to expand Enugu’s GDP from $4.4 billion to $30 billion within eight years, anchored on private sector participation, innovation, and transparent governance.

This strategic reorientation is positioning Enugu as an emerging investment hub and a model of sub-national economic transformation.

A New Model for Fiscal Autonomy

BudgIT’s verdict is more than symbolic. It sends a powerful message to investors and development partners that Enugu is fiscally stable, well-managed, and capable of withstanding financial shocks — even if federal allocations were to dwindle.

With this trajectory, Enugu can continue paying salaries, funding infrastructure, and executing key projects without waiting for monthly FAAC bailouts. It offers a replicable model for other states, proving that transparency, innovation, and discipline can build a strong, independent economy.

Context and Challenges

While Enugu’s progress is remarkable, full fiscal independence remains a work in progress. Covering 68 percent of recurrent expenses from IGR is an impressive start, but there is still ground to cover.

Sustaining these gains will require institutionalising reforms and shielding them from future policy reversals. Economic shocks such as inflation or exchange rate fluctuations could also affect the fiscal balance.

Nevertheless, the Mbah administration has laid a durable foundation for long-term stability and self-reliance — a bold departure from the culture of dependency that has long plagued Nigeria’s states.

In a federation where most states survive on monthly federal allocations, Enugu under Governor Peter Mbah has become a shining example of fiscal independence and innovation.

By cutting external debt by $39.8 million, boosting IGR to N180 billion, and enforcing a regime of disciplined spending, Mbah has proven that a Nigerian state can indeed chart its own economic destiny.

BudgIT’s ranking is not merely an accolade — it is an endorsement of visionary leadership and a wake-up call to other governors: sustainable prosperity is possible when governance is anchored on data, discipline, and strategic planning.