‘But for Ebonyi and Ekiti states, which come sixth and second respectively from the bottom, the 10 worst performing states are from the northern region with the majority of them coming from the crisis-ridden northeast. The laggard states are led by Yobe with N30.2 billion IGR in the period. Others are Gombe, Borno, Taraba, Adamawa, Nasarawa and Jigawa’
INTERNALLY-generated revenue (IGR) of the 36 states from 2016 to 2020 stood at N6.9 trillion, data analysis carried by Naija Times, has shown.
Lagos State alone generated a total of N2.46 trillion in the period. The amount puts the state’s share of the total IGR at 35 per cent or over one-third. The state’s share reflects the historical trend and its disproportional contribution to the national economy.
The total three performing states, according to the data analysis, hold 53 per cent of the amount generated, leaving the remaining 47 per cent for the other 33 states.
The top leading states are Lagos, Rivers and Ogun. While Ogun State’s five-year self-generated revenue was N515.5 billion, Rivers State pooled N692.3 billion. Delta, Kaduna and Kano did fairly well in the period, exceeding the N192.6 billion national average for the period.
The data underscores the widespread uneven economic development of the country. For instance, only Kaduna and Kano are among the top 10 performing states in terms of revenue-generating capacity in the five years. The leading 10 states are Lagos, Rivers, Ogun, Delta, Kano, Kaduna, Edo, Oyo, Akwa Ibom and Enugu.
But for Ebonyi and Ekiti states, which come sixth and second respectively from the bottom, the 10 worst performing states are from the northern region with the majority of them coming from the crisis-ridden northeast. The laggard states are led by Yobe with N30.2 billion IGR in the period. Others are Gombe, Borno, Taraba, Adamawa, Nasarawa and Jigawa.
The 10 least performing states raised 409.14 billion or about 17 per cent of the total amount generated. The amount is less than half of Lagos’ IGR in the period. The differential between the best and least-performing states – Lagos and Yobe – is about 99 per cent, showing a large degree of skewness in the data set.
In other words, the gap between wealthy and poor states is still uncomfortably high. With the rising insecurity in the far north, there are concerns that the gap could be getting wide. The disparity in the IGR-generating capacity reflects the state’s contributions to the Federation Account in terms of tax revenues.
Over the years, states with negligible IGRs depend almost 100 per cent on the Federation Accounts Allocation Committee (FAAC) for their survival. Yobe, for instance, sourced 86.4 per cent of its total available revenue of N60 billion from FAAC.
Last year, like most recent ones, only Lagos and Ogun’s IGRs contributed up or more than 50 per cent to their total available revenues. Lagos was 78.3 per cent while Ogun’s was 57.9 per cent.
Even the IGR earning of Rivers, with its huge potential, did not match its allocation from the centre. But understandably, Rivers’ share of FAAC is huge, even larger than that of Lagos. Last year, its share of the total N2.3 trillion due to the 36 states and the Federal Capital Territory (FCT) was N141.19 billion, making it the third-highest recipient, next to Akwa Ibom and Delta. That was 6.16 per cent of the states’ allocations for the year.
Delta received N186.83 billion or 8.14 per cent while Akwa Ibom got N146.27 (or 6.38 per cent) to top the table. With a meagre N30.63 billion, Osun sat on the bottom of FAAC allocation to states last year. The state’s total available revenue in the year was N42.1 billion, making it the poorest state in nominal terms. Interestingly, the state’s debt as of the end of the second quarter was N133.4 billion, which is among the highest.
Overall, the debt stock of the 36 states as of the end of the first half of the year is 59 per cent of their five-year IGR. The declared debt stock is N4.07 trillion. The Minister of Finance, Budget and National Planning, Zainab Ahmed, had disclosed to a regional audience at a recent African Development Bank (AfDB) forum that some of the states’ debts are not yet to be documented, hence not captured in the declared national debt profile.
But the 59 per cent debt to five-year IGR earnings of the states is an extremely approximate estimate. In reality, it is as high as about 200 per cent for states like Adamawa, Borno, Ekiti, Imo, Taraba and Yobe. In many other states, it is higher than 100 per cent.
A lot of states may have left the tap running even though the Federal Government is not free from the morass of fiscal indiscipline of the past years. The half-year (H1) 2021 states’ revenues data shows that the capacity is still weak and uneven. In the period, states in the northeast geopolitical zone generated average revenue of N7.2 billion.
If the Northeast is excused because of general insecurity in the axis, the performances of areas that are peaceful are not remarkably better. For instance, Southeast states could not sufficiently leverage their trade and entrepreneurship potential to boost public revenues. The whole zone realised N52.2 billion or an average of N10.4 billion per state in the period.
Again, Lagos, Ogun, Rivers and the Federal Capital Territory (FCT) – four entitles –contributed about 53 per cent of the N849.1 billion IGR the states pooled in the six months.
The total states’ IGR amounts to 27 per cent of their recurrent expenditures for the year, which is estimated at N3.1 trillion. This means their IGRs only meet about 50 per cent of the states’ recurrent spending. But most sadly, the traditional poor states are getting even poorer.
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