Economy

IGR: Lagos, Rivers, Ogun, Delta Generates N2.71tn IGR in 5 Years

Published

5 years ago

April 29, 2019

IGR: Lagos, Rivers, Ogun, Delta Generates N2.71tn IGR in 5 Years

A report showed four states generated 60.22 percent of the N4.5 trillion Internally Generated Revenue (IGR) for the country in five years.

Four states of the federation – Lagos, Rivers, Ogun and Delta – generated N2.71tn in internal revenue between 2013 and 2017, an investigation has shown.

Statistics on the performance of the 36 states of the federation obtained by our correspondent showed that the 36 states generated a total of N4.5tn within the five years under review.

This meant that the top four states in IGR generated as much as 60.22 per cent of the total IGR of the subnational governments in the country while the remaining 32 states accounted for the remaining 39.78 per cent or N1.79tn.

Expectedly, Lagos came tops on the table with a total of N1.72tn within the five-year period. With this performance, Lagos alone accounted for 38.22 per cent of the entire IGR generated by the subnational governments in the five-year period.

In 2013, Lagos generated a total of N236.2bn. The performance went up in 2014 with a total of N276.16bn. It went down slightly in 2015 to N268.2bn. In 2016, the state’s IGR went up again to N302.43bn before peaking at N333.97bn in 2017.

Rivers State came a distant second with a revenue performance of N433.9bn. Thus, the state accounted for 9.64 per cent of the total IGR collected by the states in the five-year period.

The state generated N87.91bn; N89.11bn; N82.1bn; N85.29bn and N89.48bn in 2013, 2014, 2015, 2016 and 2017 respectively.

On the third place is Ogun State, which generated a total of N286.67bn within the period of five years. Thus, the state accounted for 6.37 per cent of the total IGR that the 36 states of the federation collected within the same period of time.

The state moved steadily up in the five-year period. The state generated N13.78bn in 2013; N17.5 in 2014; N34.6bn in 2015; N72.98bn in 2016 and N74.84bn in 2017.

On the fourth position in IGR is Delta State, which generated N273.84bn in the five-year period. It, therefore, accounted for 6.09 per cent of the entire IGR collected by the subnational governments in five years.

The state generated N50.21bn; N42.82bn; N40.81bn; N44.06bn and N51.89bn in 2013, 2014, 2015, 2016 and 2017 respectively.

Four other states hit the N100bn mark in the revenues they generated within the period under review. These are Kano, Edo, Oyo and Akwa Ibom.

Kano State generated N148.75bn in the following order: N17.9bn in 2013; N13.66bn in 2014; N13.61bn in 2015; N30.96bn in 2016 and N42.42bn in 2017.

Edo State generated N126.47bn in the following order: N18.9bn in 2013; N17.02bn in 2014; N19.12bn in 2015; N23.04bn in 2016 and N25.34bn in 2017.

On the other hand, Akwa Ibom made N108.36bn spread thus in five years – N15.4bn in 2013; N15.68bn in 2014; N14.79bn in 2015; N23.27bn in 2016 and N15.96bn in 2017.

Similarly, Oyo State generated N107.43bn – N15.25bn; N16.31bn; N15.66bn; N18.88bn and N22.45bn in 2013, 2014, 2015, 2016 and 2017 respectively.

The 10 states on the bottom of the table are Yobe, Borno, Ekiti, Kebbi, Gombe, Nasarawa, Zamfara, Taraba, Katsina and Ebonyi.

Thus, no state in the South-South geopolitical zone was among the bottom of the table. Ebonyi represented the South-East in the bottom league while Ekiti represented the South-West in the bottom league.

Kebbi, Zamfara and Katsina represented the North-West on the bottom of the table. Nasarawa and Taraba represented the North-Central on the bottom of the table while the North-East was represented by Yobe, Borno and Gombe.

Yobe made a total of N18.48bn in five years. Borno generated N18.76bn in the period under review while Ekiti made N20.05bn within the five-year period.

On the other hand, Kebbi made N21.82bn; Gombe generated N21.91bn while Nasarawa generated N23bn within the period under review.

Similarly, Zamfara generated N24.51bn; Taraba generated N27.41bn; Katsina generated N30.44bn while Ebonyi made N30.91bn.

Mid-table states in terms of IGR include Kaduna which generated N95.89bn; Enugu (the first state from the South-East to show up on the radar), N93.81bn; Cross River, N88.97bn; Kwara, N87.62bn and Abia, N78.54bn.

Others are Anambara, N68.13bn; Ondo, N60.61bn; Bayelsa, N58.51bn; Benue, N55.8bn; Osun, N53.37bn; Plateau, N52.88bn; Kogi, N48.75bn; Imo, N39.76bn; Bauchi, N36.91bn; Sokoto, N35.46bn; Jigawa, N34.83bn; Niger, N34.11bn and Adamawa, N31.38bn.

On an annual basis, the 36 states generated a total of N662.05bn in 2013. This increased to N707.86bn in 2014 before coming down to N682.67bn in 2015. It rose to N820.19bn in 2016 and peaked at N936.47bn in 2017.

Low IGR has been the bane of development in the states, with many of them depending virtually on what they get from the federation account. Thus, some experts have queried the viability of the many state governments, given their low IGRs.

While some experts think that true federalism will wean the states of overdependence on the federation account, others think that there is an urgent need to restructure the federation into a federation of six geopolitical zones, instead of operating 36-state structure with three arms of government in each state of the federation.

Even in 2017 when IGR of the states stood at its peak, a higher proportion of the fund available to the states came from the federation account. While IGR accounted for N936.47bn, the states received N1.73tn from the federation account.

This means that IGR accounted for only 35.21 per cent while the federation account was responsible for 64.79 per cent of the funds available to the states.

Acting Chairman of Revenue Mobilisation, Allocation and Fiscal Commission, Mr Umar Gana, told our correspondent that the states needed help to increase their IGR but only two states – Kebbi and Katsina – had accepted to host IGR workshops facilitated by the agency.

According to him, only a few states have effective IGR system. Gana said it was because of low IGR that the states were now clamouring for new revenue formula to be able to pay the new minimum wage.

A lot more needed to be done, he added.

Up Next

Nigeria’ll Benefit from Refinery Closures in Europe –NNPC

Don't Miss

Nigeria’s Power Companies Are Weak, Bankrupt -TCN

Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Comments

Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

Published

1 week ago

April 18, 2024

Samed Olukoya

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

Economy

IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

Published

1 week ago

April 17, 2024

Samed Olukoya

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

Economy

South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

Published

1 week ago

April 17, 2024

Samed Olukoya

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.