By Modupe Gbadeyanka
Out of the 36 states of the federation, 14 of them are insolvent as their Internally Generated Revenues (IGR) in 2016 were far below 10 percent of their Federation Account Allocations (FAA) in the same year, a new report has disclosed.
The report, released by the Economic Confidential, the award winning Economic Intelligence Magazine, noted that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states in the country would find it very difficult to survive.
Economic Confidential, in its Annual States Viability Index (ASVI), pointed out that the index was carefully and painstakingly computed.
According to the magazine, the IGR are generated by states through Pay-As-You-Earn Tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDA)s. The report by this economic intelligence magazine further indicates that the IGR of Lagos State of N302 billion is higher than that of 30 States put together excluding Lagos, Ogun, Rivers, Edo, Kwara and Delta States, whose IGRs are very impressive at more than 30 percent each. The 30 other states merely generated a total of N258 billion in 2016.
Recently the magazine published the total allocation received by each state in Nigeria from the Federation Account Allocation (FAA) between January to December 2016. The latest report on IGR reveals that only Lagos and Ogun States generated more revenue than their allocations from the Federation Account by 169 percent and 127 percent respectively and no any other state has up to 100 percent of IGR to the federal largesse.
The IGR of the 36 states of the federation totalled N801.95 billion in 2016 as compared to N682.67 billion in 2015, an increase of N119.28 billion.
While the report provides shocking discoveries to the effect that 14 states which have less than 10 percent IGR may not stay afloat outside the Federation Account Allocation due to socio-political crises including insurgency, militancy and herdsmen attacks, others lack foresight in revenue generation drive coupled with arm-chair governance.
The states that may not survive without the Federation Account due to poor internal revenue generation include Borno which realized a meagre N2.6 billion compared to a total of N73.8 billion it received from the Federation Account Allocation (FAA) in 2016 representing about 4 percent.
Others are: Ebonyi with IGR of N2.3 billion compared to FAA of N46.6 billion representing 5 percent; Kebbi N3.1 billion compared to FAA of N60.88 billion representing 5.14 percent; Jigawa with N3.5 billion compared to N68.52 billion of FAA representing 5.15 percent and Yobe with IGR of N3.24 billion compared to N53.93 billion of FAA representing 6.0 percent within the period under review. Other poor internal revenue earners are Gombe which generated N2.94 billion compared to FAA of N46 billion representing 6.26 percent; Ekiti N2.99 billion compared to FAA of N47.56 billion representing 6.28 percent; Katsina N5.54 billion compared to FAA of N83 billion representing 6.65 percent and Sokoto N4.54 billion compared to FAA of N65.97 billion representing 6.88 percent.
Meanwhile Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N302 billion compared to FAA of N178 billion which translate to 169 percent in the twelve months of 2016.
It is followed by Ogun State which generated IGR of N72.98 billion compared to FAA of N57 billion representing 127 percent. Others with impressive IGR include Rivers with N85 billion compared to FAA of N134 billion representing 63 percent; Edo with IGR of N23 billion compared to FAA of N59 billion representing 38 percent. Kwara State however with low receipt from the Federation Account has greatly improved in its IGR of N17bn compared to FAA of N49 billion representing 35 percent while Delta with IGR of N44 billion compared to FAA of N126 billion representing 6.88 percent.
The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20 percent. They are Kwara, Kano, and Kaduna States.
Meanwhile eight states in the South recorded over 20 percent IGR in 2016. They are Lagos, Ogun, Rivers, Edo, Delta, Cross River, Enugu, and Oyo States State. The states with the poorest Internally Generated Revenue of less than 10 percent in the South are Imo, Bayelsa, Ekiti, and Ebonyi States while in the North we have Niger, Nasarawa, Sokoto, Katsina, Gombe, Yobe, Jigawa, Kebbi and Borno States.
Meanwhile the IGR of the respective states can improve through aggressive diversification of the economy to productive sectors rather than relying on the monthly Federation Account revenue that largely come from the oil sector.
Source: Economic Confidential
