Nigerian states’ journey to fiscal sustainability is still far ahead, 2019 Internally Generated Revenue (IGR) Data by the National Bureau of Statistics (NBS) has shown. According to the IGR report, all the thirty-six states and the FCT generated a total of ₦1.33 trillion. This amount represents about 50 percent of the federal allocation known as FAAC. The total FAAC shared to the states in 2019 stood at ₦2.5 trillion.
Apart from Lagos, Ogun and the FCT, the other thirty-four (34) states generated internal revenue below the federal allocation for the year. For instance, Lagos generated the highest, ₦398.7 billion and received ₦117.9 billion as federal allocation. Abuja and Ogun generated ₦70.9 billion and ₦74.6 billion and received ₦38.7 billion and ₦71.9 billion, respectively.
Compared to 2018, the 36 States and FCT, however, recorded a 21 per cent growth in IGR. The total IGR for 2018 was ₦1.17 trillion while that of 2019 is ₦2.5 trillion.
Borno state generated more revenue than four states
Borno state, where insurgents have raided the most for years, generated more revenue than four states. Despite being among the lowest states with IGR, Borno generated ₦8.2 billion for the period. The amount is more than the revenue of Kebbi (₦7.4 billion), Gombe (₦6.8 billion), Ebonyi (₦7.4 billion), and Taraba (₦6.50) – the state with the least internally generated revenue.
Top 10 States in IGR earnings
Lagos, Rivers, FCT, Ogun, and Delta were the top five earners of IGR in 2019. In that order, the states generated internal revenue of ₦398.7 billion, ₦140.4 billion, ₦74.6 billion, ₦70.9 billion, and ₦64.7billion. The five states that followed were Kaduna, Kano, Akwa Ibom, Enugu, and Kwara. The internally generated revenues for the top six to ten are ₦44.95 billion, ₦40.6 billion, ₦32.3 billion, ₦31.1 billion and ₦30.6 billion respectively.
2018 vs 2019 IGR: which state performed well?
In 2019, All the states recorded moderate growth in IGR except Abia, Gombe Kano, and Ogun states.
Abia declined from ₦14.83 billion in 2018 to ₦14.77 billion in 2019. Gombe recorded ₦7.34 billion in 2018 and ₦6.8 billion in 2019. For Kano state, it recorded ₦84.55 billion in 2018 and ₦70.92 billion in 2019, while Ogun state posted a difference of ₦13.63 billion from ₦84.55 in 2018 to ₦70.92 billion last year.
Yobe state, on the other hand, posted an excellent performance in 2019. Although with little revenue, the state recorded over 90 percent growth in revenue generation between 2018 and 2019.
Why is IGR so important for states
Internally Generated Revenue (IGR) shows the fiscal wellness and economic viability of a state. It is the main source of funds for states to build infrastructure and execute developmental projects. It helps states to solve perennial problems associated with governance, such as fixing bad roads, hospitals, and other infrastructural activities.
In a process where a state records low IGR, the resultant effect is a decline in socio-economic activities. Most of the states with low IGR end up borrowing to pay for recurrent and capital expenditure for that given year. There will be a backlog of salaries, infrastructural decay, and uncompleted projects.
To prepare for cater for its bills, reduce reliance on federal allocation, states must find effective ways to improve IGR, look inward for other revenue-generating components. They must also intensify efforts in other areas such as the agricultural sector, education, transport, and their peculiar natural resources.