Lagos State has continued to maintain the lead of the rest of the 35 states and the Federal Capital Territory in the generation of internal revenue (IGR), raking in as much as 20 states put together.
According to the Annual States Viability Index (ASVI) for 2019 released by the Economic Confidential in July 2020, 7 states were insolvent, considering that their IGR for 2019 fell below 10 per cent of their receipts from the Federation Account Allocations (FAA) in the same year.
Lagos alone generated as much as N398bn.
The carefully and painstakingly computed index proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable and unable to survive without the revenue, mostly from the oil sector.
The IGR are generated by states through pay-as-you-earn tax (PAYE), direct assessment, road taxes and revenues from ministries, departments and agencies (MDAs).
The IGR of the 36 states of the federation totalled N1.3 trillion in 2019, as compared to N1.1 trillion in 2018, an increase of about N200 billion. The report by the Economic Confidential, an intelligence magazine, further indicates that the IGR of Lagos State of N398bn is higher than that of 20 other States put together whose Internally Generated Revenues are extremely low, and poor compared to their allocations from the Federation Account.
Meanwhile, the Federal Capital Territory (FCT) Abuja generated N74bn IGR against N30bn from the Federation Account in the same period.
Lagos remained steadfast in its number one position in IGR with a total revenue generation of N398bn, compared to FAA of N270bn which translate to 147 per cent in the 12 months of 2019. It is followed by Ogun State, which generated IGR of N70.92bn compared to FAA of N92bn representing 77 per cent; Rivers with N140bn compared to FAA of N219bn representing 64 per cent and Kwara State with a low receipt from the Federation Account has maintained its impressive IGR by generating N30bn compared to FAA of N80bn, representing 38 per cent.
Others with impressive IGR are Kaduna, with IGR of N44bn compared to FAA of N129bn, representing 35 per cent; Enugu generated N31bn compared to FAA of N103bn representing 29 per cent; Ondo with IGR of N30bn compared to FAA of N103bn representing 29 per cent; Edo with IGR of N29bn compared to FAA of N108bn representing 27 per cent; Anambra with IGR of N26bn compared to FAA of N98bn representing 27 per cent while Cross River State earned N22bn IGR against FAA of N99bn representing 25 per cent.
These 10 states recorded an impressive IGR-generated N894bn in total, while the remaining 26 states merely generated a total of N440bn in 2019.
While most states have approved their collections, 7 of them have particularly remained poor, generating less than 10 per cent, compared to 17 states in 2018.
Leading that pack is Katsina, with the poorest and lowest IGR compared to its federal allocation in 2019 – realising a meagre N8bn compared to a total of N136bn ‘free money’ received from the FAA in 2019, representing 6 per cent. Kebbi, is next, with IGR of N7.3bn compared to FAA of N100bn, representing 7 per cent. Borno has N8bn, compared to FAA of N121bn, representing 7 per cent and Taraba with IGR of N6.5bn compared to N86bn of FAA, representing 8 per cent.
Others include Bayelsa, the home state of former President Goodluck Jonathan with IGR of N16bn compared to N176bn of FAA representing 9 per cent; Yobe with IGR of N8.4bn compared to N88bn of FAA, representing 9 per cent and Gombe with IGR of N6.8bn compared to N75bn of FAA representing 75 per cent within the period under review.
These states, no thanks to a lack of initiatives for revenue generation, coupled with arm-chair governance, have found it difficult to attract investors due to socio-political and economic crises – insurgency, kidnapping, armed-banditry and herdsmen-farmers’ clashes.
Only three states – Kwara, Kaduna and Kano, in that order – in the northern region could generate 20 per cent more in comparison to their respective allocations from the FAA. They are Kwara, Kaduna and Kano States in that order.
Meanwhile, 10 states in the South – Lagos, Ogun, Rivers, Enugu, Ondo, Edo, Delta, Anambra, Cross River and Delta states – recorded over 20 per cent IGR in 2019.
Only Bayelsa recorded less than 10 per cent compared to their FAA in the South in 2019. The other poorest IGR states are Yobe, Gombe, Borno, Taraba (Northeast), Katsina and Kebbi (Northwest).
