AN EMPIRICAL ANALYSIS OF AKWA IBOM 2025 BUDGET PERFORMANCE
~ Umo Eno’s Stewardship of Prudent Financial Management
By: Emmanuel Nicholas
Since assuming office, Governor Umo Eno has signalled a clear fiscal philosophy: no new borrowing, strong revenue discipline, and targeted investment rather than conspicuous consumption. This article reviews the 2025 budget implementation through the three quarterly reviews and assesses the financial discipline that underpins that approach.
The 2025 budget, branded the “Budget of Consolidation and Expansion,” was prepared on an IPSAS accrual basis and conforms to the revised National Chart of Accounts (NCoA). Its stated aim is to consolidate past gains and expand infrastructure and human-capital investments.
Key macro assumptions that frame the budget are a benchmark oil price of USD 75/bbl, daily oil production of 2.12 million barrels, an exchange rate of N1,400/USD, national GDP growth of 3.68%, and inflation at 32.8%. Those assumptions are material to revenue projections and to the sensitivity of the budget to external shocks.
FIRST QUARTER PERFORMANCE
In Q1 the aggregate revenue inflow (FAAC + independent revenue) was N277,908,246,067.63; this was reported as 33.5% performance against an approved provision of N830,000,000,000 for total FAAC and independent revenue in that quarter’s presentation.
The Q1 breakdown shows FAAC (statutory) receipts of N261,599,052,028.62 (34.6% of the approved statutory allocation of N755bn) and independent revenue of N16,309,194,039.01 (21.7% of an N75bn target). Independent revenue underperformed relative to FAAC in Q1.
Q1 recorded no capital receipts against an approved provision of N25,000,000,000 for that category. The absence of capital receipts reduces the options available for financing capital projects other than recurrent surpluses or external financing.
Recurrent expenditure in Q1 amounted to N65,734,396,480.00 (21.9% of an N300bn approved recurrent envelope), with personnel costs of N30.79bn and overhead/other recurrent costs of N34.94bn.
Capital expenditure in Q1 was relatively large at N133,898,921,709.38, which represented 20.4% of an approved capital provision of N655bn. That implies a front‑loaded capital disbursement in the first quarter.
The Q1 profile therefore shows a mix: strong FAAC inflows, modest independent revenue, zero capital receipts, moderate recurrent spending, and a substantial capital outflow. This suggests early‑year acceleration on some capital projects.
SECOND QUARTER PERFORMANCE
In Q2 the economy continued to perform: aggregate revenue inflow for the quarter was N251,039,965,164.87, bringing year‑to‑date receipts to N406,205,145,244.27, which the report treats as 71.3% of the relevant approved provision (noting different totals cited in different quarters).
Q2 statutory (FAAC) receipts were N241,533,971,332.73 for the quarter and N374,463,155,886.03 YTD (73.4% of an N510bn statutory allocation target). Independent revenue in Q2 was N9,505,993,832.14, YTD N31,741,989,358.24 (52.9% of a N60bn target).
Q2 recorded capital receipts of N2,246,350,895.60 in the quarter (same YTD).
Recurrent expenditure in Q2 was N53,629,218,367.54, bringing YTD recurrent spending to N100,480,888,605.93 (30.2% of an N359.065bn approved recurrent budget). This continues the pattern of conservative recurrent spending relative to full‑year budgets.
Capital expenditure in Q2 was only N22,552,486,250.96, leaving YTD capital spending at N66,157,430,387.77—about 13.5% of a large approved capital envelope. The report attributes some of the low Q2 capital execution to documentation of newly awarded projects being finalised.
The Q1–Q2 pattern reveals steady FAAC receipts, variable independent revenue performance, modest capital receipts, and a sharp reduction in capital spending after Q1’s high level.
Q3 added N250,631,323,745.70 in aggregate revenue and pushed YTD receipts to N656,836,468,989.97—reported as 115.2% performance against the approved provision of N570bn for FAAC and independent revenues. This marks a significant overrun of the projected revenue target.
THIRD QUARTER PERFORMANCE
The Q3 breakdown shows statutory FAAC receipts of N240,901,800,811.67 for the quarter and YTD N615,364,956,697.70, about 120.7% of the N510bn statutory target. Independent revenue in Q3 was N9,729,522,934.03, YTD N41,471,512,292.27 (69.1% of the N60bn independent revenue target).
Recurrent expenditure in Q3 was N45,174,946,039.62, bringing YTD recurrent spending to N145,655,834,645.55—about 40.6% of the stipulated N359.065bn recurrent budget. Recurrent outlays remain materially under the pro‑rated expectation for three quarters.
Capital expenditure in Q3 was N16,948,462,878.62, taking YTD capital spending to N83,105,893,259.39—16.9% of an approved N490.905bn capital envelope.
Officially, the third‑quarter review records an overall budget performance of 86.9%. Reconciliation suggests that this high composite score is driven largely by FAAC overperformance combined with tight control over recurrent spending.
ADVANTAGEOUS VIEWS OF THE 2025 BUDGET IMPLEMENTATION
The governor’s no‑borrowing stance since taking office is a defining fiscal discipline. Avoiding new debt reduces debt‑service obligations and preserves fiscal space for future administrations, but it also constrains the range of funding instruments available for accelerated capital delivery.
The administration reports saving over 30% from its financial revenues. That level of saving increases reserves and provides a buffer against revenue volatility.
Investments in real estate, tourism, healthcare, agriculture, road infrastructure, enterprise empowerment, and education—areas explicitly prioritised—are long‑term growth and human‑capital focused. The implementation of these allocations will boost non‑oil revenue, create jobs, and improve service delivery.
Preparing the budget in IPSAS accrual format and using the revised NCoA is a positive governance step. These frameworks improve transparency, comparability, and the quality of fiscal reporting, which is important when assessing performance and holding the administration accountable.
Given the savings currently reported, the state has an opportunity to formalise stabilisation and contingency reserves. A clear rule‑based framework for how savings are used—whether for capital investment, reserves, or debt repayment—will strengthen fiscal credibility.
While the governor’s no‑borrowing policy is prudent, selective concessional borrowing or public‑private partnerships could be considered for bankable, revenue‑generating projects where the return justifies the cost. This would accelerate infrastructure without undermining fiscal discipline.
Continued IPSAS‑compliant reporting and quarterly public disclosure of budget implementation details will improve accountability. Publishing project‑level execution data, timelines, and funding sources will reduce ambiguity and build investor confidence.
Investment in health, road infrastructure, enterprise empowerment, education, and tourism promises multi‑dimensional returns: improved human capital, increased internal demand, potential tourism receipts, and stronger long‑term productivity. Monitoring indicators (enrolment, health outcomes, tourist arrivals) will be necessary to measure impact.
The entry into Q4 with a supplementary N1.65 trillion budget represents both an opportunity and a test. Governor Umo Eno’s supplementary budget, if aligned with realistic implementation capacity and properly prioritised, will accelerate consolidation and expansion.
In sum, Governor Umo Eno’s 2025 fiscal record through Q3 reflects disciplined revenue management (notably FAAC overperformance), strict control of recurrent spending, and cautious avoidance of new borrowing.
The policy challenge for Q4 and 2026 will be converting strong revenue and large savings into completed projects that deliver measurable social and economic benefits.
With continued transparency, better independent revenue mobilisation, faster capital project implementation, and prudent use of any additional financing, the administration can sustain its record of fiscal discipline while achieving the expansion envisaged in the Budget of Consolidation and Expansion.
Governor Umo Eno’s 2025 “Budget of Consolidation and Expansion” shows clear fiscal discipline: IPSAS‑accrual preparation, adherence to the revised National Chart of Accounts, a strict no‑new‑borrowing stance, and a focus on infrastructure and human‑capital investments.
Through Q1–Q3 the state posted strong aggregate receipts (YTD N656.8bn), driven mainly by FAAC overperformance (about 120.7% of the statutory target), while independent revenue trailed but improved to ~69.1% of target. Recurrent spending was kept well below pro‑rata expectations (≈40.6% YTD of the recurrent envelope), generating significant savings (reported >30% of financial revenues). Capital outlays were front‑loaded in Q1 but have been low overall (≈16.9% of the approved capital envelope YTD), and capital receipts were negligible in Q1 and modest thereafter.
The administration’s emphasis on transparency and savings, together with targeted investments in roads, health, education, agriculture, tourism, and enterprise empowerment, positions the state to boost non‑oil revenue and long‑term growth.
