• Poor states: Yobe, Zamfara, Ekiti, Borno, Kebbi, Nassarawa, Taraba, Adamawa, Gombe, Jigawa, Bauchi, Imo, Katsina, Niger
• Rich states: Lagos, Rivers, Delta, Ogun, Edo
• Lagos IGR dwarfs that of 32 states
Fifteen states in Nigeria may go bankrupt as over 90 per cent of their revenues come solely from the Federation Account Allocations (FAA). The states’ Internally- Generated Revenues (IGRs) in 2015 were far below 10 per cent of their FAA in one year from June 2015 to May 2016 covering the one-year of President Muhammadu Buhari’s administration.
This precarious situation is making the financially sick states gasping for survival under the country’s current economic situation. Already, many of the states have arrears of unpaid workers’ salaries while some of them have resorted to loans from banks to meet their financial obligations.
A report by the Economic Confidential, an economic intelligence magazine, released yesterday, indicates that the IGR of Lagos State of N268 billion is higher than that of 32 states combined, excluding Rivers, Delta and Ogun, whose IGRs are very impressive.
According to the study, the 32 other states merely generated a total of N257 billion in 2015. The IGR of the 36 states of the federation totalled N682.67 billion in 2015, compared to N707.85 billion in 2014, representing a drop of N25.18 billion or a minus 3.56 per cent.
The report provides shocking discovery that indicates that 15 states may go bankrupt and may not stay afloat outside the FAA, a development linked to “lack of foresight in revenue generation drive, coupled with arm-chair governance.”
Ironically, all the states have boards of internal revenue agencies. The states that may not survive without the Federation Account due to poor internal revenues, according to the report, include Yobe, Zamfara, Ekiti, Borno, Kebbi, Imo, Taraba and Nassarawa.
Others are Adamawa, Gombe, Jigawa, Bauchi, Katsina, Niger and Sokoto. According to the report, Yobe generated meagre N2.2 billion compared to a total of N57.4 billion it received from the FAA from June 2015 to May 2016, representing about 3.9 per cent.
Others are Zamfara with IGR of N2.7 billion, compared to FAA of N56.6 billion, representing 4.8 per cent; Ekiti, N3.2 billion compared to FAA of N50.460 billion, representing 6.5 per cent; Borno with N3.5 billion compared to N78.7 billion of FAA, representing 4.5 per cent and Kebbi with IGR of N3.5 billion compared to N64.8 billion of FAA, representing 5.5 per cent within the period under review.
Other poor internal revenue earners are Taraba, which generated N4.1 billion compared to FAA of N56 billion, representing 6.4 per cent; Nassarawa N4.4 billion compared to FAA of N50.5 billion, representing 8.5 per cent; Adamawa, N4.4 billion compared to FAA of N62.2 billion, representing 7.1 per cent; and Gombe N4.7 billion compared to FAA of N49.8 billion, representing 9.6 per cent.
They also include Jigawa, N5 billion compared to FAA of N73 billion, representing 7 per cent; Bauchi N5.3 billion compared to federal allocation of N72.6 billion representing 7.4 per cent; Imo N5.4 billion compared to FAA of N71.6 billion, representing 7.6 per cent; Katsina N5.7 billion compared to FAA of N88.8 billion, representing 6.5 per cent; Niger N5.9 billion compared to FAA of N74.8 billion, depicting 8 per cent and Sokoto N6.2 billion compared to FAA of N69.7 billion, representing 8.9 per cent.
The latest report on IGR reveals that only Lagos State generated more revenue than its allocation from the Federation Account by 150 per cent and no other state has up to 100 per cent of IGR to the federal largesse.
Lagos State retains its number one position in IGR with a total revenue generation of N268.22 billion in the 12 months.Lagos is followed by Rivers with N82.10 billion; Delta with N40.80 billion; Ogun State with N34.59 billion and Edo generating N19.11 billion.
However, five states look good to be on top of the current economic challenges. They are: Enugu, Oyo, Anambra, Akwa Ibom and Kano with N18.08 billion, N15.66 billion, N14.793 billion, N14.791 billion, and N13.611 billion respectively in IGR.
The study further showed that the richest northern state is Kano, which is the only state from the North to be among the 10 highest IGR earners while the rest are Southern states.
The poorest southern state is Ekiti, which is the only state from the South to be among the 10 lowest IGR earners while the rest in the category and bottom of the ladder are northern states.
Hope is not lost as the report suggests that the 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.
A good number of the states cannot pay workers’ salaries. Just last week, President Buhari described as disgraceful a situation where two-thirds of state governments are unable to pay salaries of their workforce.
His words: “27 out of the 36 states cannot pay salaries. This is a disgrace to Nigeria. It is a disgrace up till now that most of the states cannot pay salaries. What happened to all we have gotten over the years? We look up and down, left, right and centre, what have we saved?
There was nothing because we developed a consumption culture that we were not supposed to develop. Most of your colleagues that have left service, I doubt if they are getting benefits.
That is the situation we find ourselves in.” Workers in Ekiti State just called off their fourweek strike over nonpayment of salaries while workers in Kogi State today begin indefinite strike. Civil servants in Imo, Kwara, Osun, Ondo, Osun, Oyo and other states have, at one time or the other, embarked on industrial action.
New Telegraph, however, gathered that effective deployment of Information and Communications Technology (ICT) tools and solutions could help the states increase their IGR. “Technology has, indeed, become an enabler of economic development and leveraging the power of ICT to boost states’ revenue in our current economic situation.
This has become essential, for it will help block all the leakages in revenue generation,” said President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, in a telephone interview with this newspaper yesterday.
-New Telegraph
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