Bayelsa, Katsina, 4 others top list of poor states in IGR –Report

The seventh Annual States Viability Index (ASVI) report released by Economic Confidential, an intelligence magazine, has declared six states insolvent.

The basis for the declaration is that their Internally Generated Revenues (IGR) in 2022 were below 10 per cent of their receipts from the Federation Account Allocations (FAA) in the same year.

The report revealed that while some states have improved their IGR compared to previous years, others performed poorly. In 2022, six states generated less than 10 per cent IGR compared to two states in 2021.

The report signed by Abdulrahman Abdulraheem, the 

Managing Editor of Economic Confidential, noted that the six states that may not survive without the federation account are Bayelsa, Katsina, Akwa Ibom, Taraba, Yobe and Kebbi states. Adamawa narrowly escaped as it generated N13.1 billion compared to FAA of N116 billion representing 11.29 per cent in 2022 which was less than 2 per cent over its 13 per cent last year.

Abdulraheem explained that the index, which was carefully and painstakingly computed, proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable, and cannot survive without the Federal Government’s monthly subvention which are partly revenues from crude sales and non-oil sources. 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 noted that the IGR of the 36 states of the federation totalled N1.8 trillion in 2022 was above that of 2021 which was N1.76 trillion. 

The report by the Economic Confidential, an intelligence magazine, further indicates that the IGR of Lagos State of N651 billion is higher than that of 30 other States put together whose Internally Generated Revenues are extremely low and poor compared to their allocations from the federation account.

Lagos remained steadfast in its number one position in IGR among the states with a total revenue generation of N651 billion compared to FAA of N370 billion which translated to 176 per cent in the twelve months of 2022. Ogun State, which generated IGR of N120 billion, compared to its FAA of N113 billion representing 106 per cent, followed by Rivers with generated N172 billion IGR compared to FAA of N363 billion representing 48 per cent; Kaduna State with N58 billion compared to FAA of N155 billion representing 37 per cent; Kwara with IGR of N35 billion compared to FAA of N99 billion representing 36 per cent and Oyo generated N62 billion compared to FAA of N181billion representing 34 per cent and Edo generated N47 billion IGR compared to N147 billion FAA representing 32%.

The total internally generated revenues of N1.15 trillion from the seven most viable states in 2022 was almost twice the total IGR of 29 remaining states put together that merely generated about N650 billion.

Others with impressive IGR include Anambra with IGR of N33 billion compared to FAA of N127 billion representing 27%; Enugu with IGR of N28 billion compared to FAA of N111 billion representing 26%; Ondo with IGR of N32 billion compared to FAA of N135 billion representing 24% while Nasarawa State earned N19 billion IGR against FAA of N92 billion representing 21%. Delta generated N85 billion IGR against its receipt of N428 billion from FAA representing 20%. And Osun with IGR of 24 billion compared to its FAA of N122 billion representing 20%.  

The six states with impressive IGR generated N225bn in total, while the remaining 23 states generated a total of N426bn in 2022.

The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20% in comparison to their respective allocations from the Federation Account. They are Kaduna, Kwara and Nasarawa States in that order.

Meanwhile, eight states in the South recorded over 20% IGR in 2022. They are Lagos, Ogun, Rivers, Oyo, Edo, Anambra, Enugu and Ondo. 

The oil producing Bayelsa and Akwa ibom are the only states in the South with the poorest Internally Generated Revenue of less than 10% compared to their FAA in 2022.

The other poorest IGR states are Katsina and Kebbi in North-West; Yobe and Taraba in the North-East.

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 revenues that largely come from the oil sector.

The poor states with lower IGR may not stay afloat outside the monthly allocations from the Federation Account due to lack of initiatives for revenue generation drive coupled with arm-chair governance. Some of the states cannot attract investors due to socio-political and economic crises including insurgency, kidnapping, armed banditry, and herdsmen-farmers clashes.


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