Lagos Generates More IGR than 30 States Combined

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  • Lagos Generates More IGR than 30 States Combined

Fourteen states are insolvent as their Internally Generated Revenues (IGR) in 2016 were far below 10 per cent of their Federation Account Allocations (FAA) in the same year.

The index, which was released on Monday by Economic Confidential, an Economic Intelligence Magazine, showed that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states are unviable, and cannot survive without the federally collected revenue.

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 as contained in the Annual States Viability Index (ASVI), further indicated that the IGR of Lagos State of N302billion is higher than that of 30 states put together excluding Lagos, Ogun, Rivers, Edo, Kwara and Delta States whose IGRs are very impressive at more than 30 per cent each.

The 30 other states merely generated a total of N258billion in 2016.

The latest report on IGR revealed that only Lagos and Ogun States generated more revenue than their allocations from the Federation Account by 169 per cent and 127 per cent respectively and no any other state has up to 100 per cent of IGR to the federal largesse.

The IGR of the 36 states of the federation totalled N801.95 billion in 2016 as compared to N682.67 billion in 2015, an increase of N119.28 billion.

While the report provides shocking discoveries to the effect that 14 states which have less than 10 per cent IGR may not stay afloat outside the Federation Account Allocation due to socio-political crises including insurgency, militancy and herdsmen attacks, others lack foresight in revenue generation drive coupled with arm-chair governance.

The states that may not survive without the Federation Account due to poor internal revenue generation include Borno which realised a meagre N2.6billion compared to a total of N73.8 billion it received from the Federation Account Allocation (FAA) in 2016 representing about four per cent

Others are: Ebonyi with IGR of N2.3 billion compared to FAA of N46.6bn representing five per cent Kebbi N3.1 billion compared to FAA of N60.88 billion representing 5.14 per cent; Jigawa with N3.5 billion compared to N68.52 billion of FAA representing 5.15 per cent and Yobe with IGR of N3.24nn compared to N53.93 billion of FAA representing 6.0 per cent within the period under review.

Other poor internal revenue earners are Gombe which generated N2.94 billion compared to FAA of N46 billion representing 6.26 per cent; Ekiti N2.99 billion compared to FAA of N47.56bn representing 6.28 per cent; Katsina N5.54 billion compared to FAA of N83bn representing 6.65 per cent and Sokoto N4.54 billion compared to FAA of N65.97 billion representing 6.88 per cent.

Meanwhile Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N302bn compared to FAA of N178 billion which translate to 169 per cent in the twelve months of 2016.

It is followed by Ogun State which generated IGR of N72.98 billion compared to FAA of N57 billion representing 127 per cent.

Others with impressive IGR include Rivers with N85 billion compared to FAA of N134bn representing 63 per cent; Edo with IGR of N23bn compared to FAA of N59 billion representing 38 billion.

Kwara State however with low receipt from the Federation Account has greatly improved in its IGR of N17 billion compared to FAA of N49 billion representing 35 per cent while Delta with IGR of N44 billion compared to FAA of N126 billion representing 6.88 per cent.

The ASVI further showed that only three states in the entire Northern region have IGR above 20 per cent.

They are Kwara, Kano, and Kaduna States. Meanwhile eight states in the South recorded over 20 per cent IGR in 2016. They are Lagos, Ogun, Rivers, Edo, Delta, Cross River, Enugu, and Oyo States State.

The states with the poorest IGR of less than 10 per cent in the South are Imo, Bayelsa, Ekiti, and Ebonyi States while in the North we have Niger, Nasarawa, Sokoto, Katsina, Gombe, Yobe, Jigawa, Kebbi and Borno States.

It, however, said he IGR of the respective states can improve through aggressive diversification of the economy to productive sectors rather than relying on the monthly Federation Account revenue that largely come from the oil sector.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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