The latest Internally Generated Revenue (IGR) data released by the National Bureau of Statistics (NBS) shows that the 36 states and Federal Capital Territory (FCT) generated a total of N1.90 trillion in 2021.
According to the data sourced from NBS, the 2021 IGR increased by 21.54 percent compared to N1.56 trillion recorded in 2020.
It is important to state that the 2020 figure is a revised figure as the previous data published by NBS put the 2020 revenue at N1.31 trillion, the same as the 2019 figure.
In the early hours of October 17, the NBS published the 2021 full-year IGR report.
IGR is one of the major sources of revenue for states. It is generated through Pay-As-You-Earn Tax (PAYE), Direct Assessment, Road Taxes, and revenues from Ministries, Departments and Agencies (MDAs) and is often used to determine the financial strength of a state. In fact, Economists use it to evaluate a state’s capacity to drive long-term economic activity, such as boosting employment and providing effective public services.
According to the 2021 report, the total revenue generated by the states and FCT amounted to N1.90 trillion, which signified a 21.54percent increase compared to the previous year.
A breakdown of the figure shows that Lagos topped other states to generate N753.46 billion in the year under review. The FCT generated N131.92 billion. Rivers state made a total of N123.35 billion, standing as the third state with the highest IGR in 2021. Altogether, the 3 states accounted for 53.21percent of the total revenue generated in 2021
On the bottom are Yobe, Taraba and Kebbi. The states generated N8.46 billion, N9.63 billion and N9.86 billion, respectively.
Further analysis of the data shows that, although Lagos, FCT, and Rivers generated the highest revenue, however, Sokoto and Ogun, Imo states recorded the highest growth rate year-on-year.
In 2020, Sokoto generated N11.79 billion as internal revenue. At the end of 2021, the state’s IGR stood at N23.76 billion, signifying a 101.44percent increase. Among the 36 states and FCT, the state recorded the highest growth rate. Ogun and Imo followed with a 99.23percent and 66.27percent growth rate, respectively.
On the other hand, Kebbi, Jigawa and Ebonyi recorded negative growth in 2021. A comparison of the 3 states’ performance in 2021 over 2020 shows that their IGR declined by 28.46percent, 20.17percent, and 13.49percent, respectively. It is important to note only these 3 states recorded a decrease in their IGR in 2021.
In spite of the cumulative 21.54percent increase the 36 states and FCT recorded in 2021, data shows that the IGR generated by the states is still lower than the total FAAC allocation they received in the same year under review. Thus, indicating that the majority of states in Nigeria are still heavily reliant on FAAC allocation for survival.
According to the data from NBS, the 36 states received N2.42 trillion as FAAC disbursement in 2021, while they only generated N1.76 trillion (i.e., minus the FCT). This show that FAAC disbursement to the 36 states was 27.22percent higher than the total internal revenue they generated in 2021.
It is important to highlight that only Lagos and Ogun states generated an internal revenue that is higher than what they received as FAAC allocation in the year under review.