The Q1 Financial Report Raises More Questions Than It Answers.
Friday Perspective
By Wale Obanigba, Esq.
A few months ago, I asked: Who Is Holding Ondo State’s Money Hostage?. My argument then was that governance in Ondo was not primarily a revenue problem. It was a problem of access to, and deployment of, available public funds. Budgets were approved, revenues kept coming in, yet many Ministries, Departments and Agencies, MDAs, could not execute projects because funds were either delayed or not made unavailable for its implementation.
The Ondo State Budget Office’s unaudited Q1 2026 Revenue Performance Report gives us a chance to glance through the financial status of the OndoState. The numbers look strong on paper. They also raise harder questions about financial management and budget implementation.
At first glance, fiscal performance appears remarkable. Total revenue was reported at ₦305.1 billion, or 232.7 per cent of the quarterly target. An opening balance of ₦218.1 billion carried over from 2025. The 2026 budget had projected ₦158.9 billion as opening balance. The State therefore started the year with ₦58.9 billion more than expected, a surplus of about 37 per cent.
Even after removing that carry-over, Ondo State generated roughly ₦87 billion in Q1, representing 95.3 per cent of its revenue target. The implication is that Ondo is not facing an immediate liquidity crisis. Government has cash. The challenge is converting that cash into visible development.
A more telling figure stands out. Of active revenue, 82.1 per cent came from the Federation Account Allocation Committee, FAAC, while only 13.5 per cent came from Internally Generated Revenue, IGR. Even after adjusting for one-off receipts, FAAC dependence remains about 78.6 per cent.
This import of this is that for every one naira earned in the quarter, only about 13.5 kobo was generated internally. The rest came largely from Abuja. That level of dependence leaves the State exposed to fluctuations in federal revenue, oil prices, and the wider national economy. A resilient subnational economy cannot rely indefinitely on monthly allocations. Ondo must broaden its base by attracting private investment, expanding industry, strengthening agriculture and tourism, and diversifying taxes beyond PAYE.
To its credit, the Ondo State Internal Revenue Service exceeded its tax target by over 123 per cent, and that deserves commendation. Yet nearly 74 per cent of IGR came from one single source, the PAYE. In other words, IGR growth is being driven mainly by salaries, not by economic expansion.
FAAC dependence alone does not explain the slow pace of infrastructure. The report confirms the State entered 2026 with over ₦218 billion in cash. Yet road deficits, overstretched health facilities, under-resourced public schools, and rural infrastructure gaps remain visible across the State.
The capital financing section is worrisome. Government projected more than ₦13.1 billion in foreign loans for infrastructure in Q1. By March, only about ₦300 million had been accessed. Planned domestic borrowing recorded zero drawdown. All ten foreign-funded projects recorded no financing because of documentation delays.
This restates the concern from my earlier article. The issue is not whether money exists, but whether it reaches projects in time. Budgets do not build roads. Cash balances do not equip hospitals. Financial statements do not renovate schools. Development happens only when approved funds are released, contracts are signed, and work is delivered.
The contrast between education and health makes the point. SUBEB realised ₦4.03 billion, or 62.6 per cent of its annual target, because documentation was completed early and federal grants were accessed. The Ministry of Health, by contrast, realised ₦724 million, or 6.4 per cent of its target, because donor-supported funds were delayed. The lesson is simple: institutional efficiency determines whether resources become services.
The report also intensifies a public concern. If Government holds substantial liquidity while capital projects move slowly, citizens are right to ask questions. There is growing speculation that portions of available cash are being held in banks rather than deploy it for capital development. The report neither confirms nor refutes this. The antidote to speculation is openness. Citizens should see regular disclosures on capital releases, project timelines, and reasons for delays. Accountability builds confidence.
The Q1 report presents a paradox. Ondo State looks financially stable, but development is slower than expectations. Cash reserves are healthy, yet FAAC dependence is high. Revenue collection is improving, but capital implementation lags behind available resources.
My earlier question therefore stands. Ondo’s principal challenge is not the availability of money. It is the ability to convert financial resources into visible development. That will require expanding IGR, reducing FAAC dependence, and, just as importantly, making capital releases more transparent, efficient, and timely.
Until that happens, public finance will be visible in government accounts, but not yet in better roads, modern hospitals, quality schools, and the infrastructure that defines real development.
Wale Obanigba, Esq., is a legal practitioner writing from Akure.
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