Despite huge potentials, many states record low IGR

Despite huge potentials in agriculture, mining and water resources, many states in the country have continued to record low internally generated revenue (IGR). Most of the states have also continued to depend on federal allocation to pay salaries and undertake other vital operations of the government in spite of numerous ways they can garner hidden […]

Despite huge potentials in agriculture, mining and water resources, many states in the country have continued to record low internally generated revenue (IGR).

Most of the states have also continued to depend on federal allocation to pay salaries and undertake other vital operations of the government in spite of numerous ways they can garner hidden and apparent wealth.

In the 2022 IGR data by the National Bureau of Statistics (NBS), only Lagos, Rivers, the Federal Capital Territory (FCT) and Ogun could raise tangible revenue, while other states recorded very low revenue.

In fact, the three states and the FCT individually earned more through IGR than South East and North East in 2022, the latest IGR data by the NBS has shown.

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The NBS data shows that a total of N1.93trillion was generated as IGR across the 36 states in Nigeria, including the FCT in 2022. The 2023 IGR data is yet to be released.

The data stated that Lagos, Rivers, FCT and Ogun top the list with N651.15billion, N172.89 bn, N124.4 bn and N120.58bn respectively, while the four states in the bottom of the list are Kebbi (N9.1 bn), Taraba (N10.2 bn), Yobe (N10.5bn) and Ebonyi (N12.4bn).

The five states in the South East cumulatively generated N114.5bn, which is far less than what Lagos (N651.15bn), Rivers (172.89bn), FCT (124.4bn) and Ogun (120.58bn) individually earned as IGR in 2022.

Similarly, each of the four leading states’ IGR individually dwarfed the combined revenue of the six states in the North East (N92bn).

The geo-political zone with the highest IGR is South West with N908.3bn, followed by states in the South South with N378bn, and states in the North Central trailing behind with N246.4bn. The North West states came fourth with N186.4bn and South East followed with N114.5bn, while North East came rear with N92bn.

The top three performers in the South West are  Lagos, N651.15bn;  Ogun, N120.58bn and Oyo, N62.25bn.

In the South South, the three highest earners are Rivers, N172.82bn; Delta, N85.90bn, and Edo, N47.46bn.

In the North Central, FCT led with N124.37bn, followed by Kwara, N35.76bn and Nasarawa, N19.28bn.

Kaduna came first in the North West with N58.09bn, followed by Kano, N42.51bn and Sokoto, N23.62bn.

In the South East, Anambra came top with N33.97bn, while Enugu came behind with N28.69bn and Abia trailed Enugu with N29.11bn.

In the North East, Bauchi got the highest IGR with N25.47bn, while Borno came second with N19.06bn and Gombe came third with N13.60bn.

The NBS data shows that Imo State took the lead in year-on-year  growth with +51 per cent IGR growth rate, followed by Bauchi, +42.3 per cent; Rivers, +40.1 per cent; Kwara, +32.6 per cent; Gombe, +28.7 per cent; Benue, +26.6 per cent and Ekiti, +25.0 per cent.

Meanwhile, financial and economic experts have said states can improve on their internally generated revenue by engaging in strategic planning and taking advantage of their comparative advantage in agriculture.

They also said the 36 states and the FCT should buy shares in the multinationals in order to raise their internally generated revenues.

Speaking with Daily Trust on Sunday, a Lagos-based financial expert, Lekan Wojuola, said states could raise their IGRs by engaging in strategic planning and taking advantage of their comparative advantage in agriculture.

Wojuola added that the states should also encourage entrepreneurships in their domains and also put in infrastructure to attract investors.

Abdulkareem Garba, a lawyer, said reviewing the 1999 constitution would enable states and local governments to initiate mechanisms that would provide an enabling environment to improve their domestic economies and shore up their internal revenues.

Idowu Alabi, a public affairs analyst, advised state governments to buy shares in multinationals to raise their IGR.

The NBS had said the taxes recorded in the sub-category in the period (2022) included Pay As Your Earn (PAYE), direct assessment, road taxes, stamp duties, capital gain tax, withholding taxes, other taxes and revenues from local governments.

“PAYE was the most contributing revenue source during the year, it recorded 67.62 per cent share to the total tax generated revenues nationwide, while capital gains tax was the least in the year under review with 0.24 per cent share to total tax revenue,” the NBS data stated.