According to the Annual States Viability Index (ASVI) 2022 report released by Economic Confidential on Monday in Abuja, six states in Nigeria are not financially viable. These states are Bayelsa, Kebbi, Katsina, Akwa Ibom, Taraba and Yobe.
The report indicated that the Internally Generated Revenues (IGR) of these states in 2022 were less than 10% of the funds they received from the Federal Account Allocations Committee (FAAC). This means that they cannot survive on the allocation they receive from FAAC alone.
“The index 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 federally collected revenue, mostly from the oil sector.
“The IGRs are generated by states through Pay-As-You-Earn tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDAs).
Plateau Utd rout Bayelsa Utd as Remo Stars lose to Pillars
Uba Sani asks Kaduna assembly to approve N458bn budget for 2024
“The IGR of the 36 states of the federation totaled N1.8 trillion in 2022 was above that of 2021 which was N1.76tr. The report by the Economic Confidential, an intelligence magazine further indicates that the IGR of Lagos State of N651bn 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.
According to a report, Lagos State has retained the top spot in internally generated revenue (IGR) among Nigerian states, generating a total of N651bn in revenue in 2022, compared to its allocation from the federal account (FAA) of N370bn, representing a 176% increase.
Ogun State came in second, generating IGR of N120bn compared to its FAA of N113bn, representing a 106% increase. Rivers State generated N172bn IGR compared to its FAA of N363bn, representing a 48% increase. Meanwhile, Kaduna State generated N58bn compared to its FAA of N155bn, representing a 37% increase, and Kwara State generated IGR of N35bn compared to its FAA of N99bn, representing a 36% increase. Oyo State generated N62bn IGR compared to its FAA of N181bn, representing a 34% increase, and Edo State generated N47bn IGR compared to its FAA of N147bn, representing a 32% increase.
The report also revealed that the total IGR generated by the seven most viable states in 2022 was N1.15tr, which is almost twice the total IGR of the 29 remaining states that generated about N650bn. Anambra State had an impressive IGR of N33bn compared to its FAA of N127bn, representing a 27% increase, while Enugu State generated IGR of N28bn compared to its allocation of N111bn, representing a 26% increase. Ondo State generated IGR of N32bn compared to its allocation of N135bn, representing a 24% increase, and Nasarawa State earned N19bn IGR against its allocation of N92bn, representing a 21% increase.
The report also identified six states with poor internal revenue generation of less than 10% compared to their federal allocations, which may not survive without the Federation Account. Furthermore, only three states in the northern region have IGR above 20% in comparison to their respective allocations from the Federation Account, namely Kaduna, Kwara, and Nasarawa states in that order.
“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,” it added.
The report recommended that the IGR of the respective states can be improved 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.
