Adedapo Adesanya
By Adedapo Adesanya
A transparent report has revealed that all 36 states of the federation grew revenue by 29 per cent to N6.6 billion in 2022 from N5.1 trillion in 2021.
This was disclosed by BudgIT, a civic advocacy organisation in its 2023 edition State of States report released earlier this week.
The report explained that the Internally Generated Revenue (IGR) of the 36 states appreciated by 12.98 per cent from N1.61 trillion in 2021 to N1.82 trillion in 2022, denoting a strengthened domestic revenue mobilisation capability.
The report showed said the IGR to Gross Domestic Product (GDP) ratio remained very low at 1.01 per cent.
“The increase in IGR did not reflect across the board as 17 states experienced a decline in their IGR from the previous year while 19 states recorded positive growth.
“Occasioned by a 49.2 per cent increase in global oil prices, gross federal transfers rose by 35.68 per cent from the previous year to N4.05 trillion, despite a 12.55 per cent drop in crude oil production,” it said.
Cumulatively, it said states’ reliance on transfers from the federal government increased from 58.4 per cent in 2021 to 61.45 per cent in 2022.
It said that taken apart, at least 70 per cent of the total revenue of 16 states comprised federal transfers, while 32 states depended on transfers from the federal government for at least 50 per cent of their revenue.
The report said the viability of states still depends largely on their ability to mobilise revenue internally, primarily through taxes.
To do this, it said states will need to implement reforms aimed at strengthening their tax mobilisation capacity, broadening and diversifying their tax base, formalising their informal sector using technology, and establishing a robust consequence management regime to address and deter instances of corruption.
According to the report, the total expenditure of the 36 states put together stood at N8.2 trillion, 24.7 per cent more than the N6.58 trillion spent in 2021.
“Save for three states Anambra, Cross River and Rivers 33 States had an increase in their total spending in the 2022 fiscal year.”
The report added that considering the huge deficit in infrastructure, primary health care, education, and key ease of doing business metrics, several states are concentrating their resources on improving infrastructure and security, improving transparency and accessibility to information, reforming the regulatory environment, and improving health and educational outcomes.
