BREAKING NEWS, Business
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FIFTEEN states in Nigeria may go bankrupt as their Internally Generated Revenues, IGR, are below 10 percent of their Federation Account Allocations, FAA, in one year from June 2015 to May 2016. The IGR of Lagos State of N268billion is higher than that of 32 States combined together excluding Rivers, Delta, and Ogun who’s IGRs are very impressive. The 32 other states merely generated a total of N257billion in 2015.
This allocation to each state in Nigeria from the FAA was between June 2015 and May 2016 under the one year of President Muhammadu Buhari’s administration. The IGR reveals that only Lagos State generated more revenue than its allocation from the Federation Account by 150 percent and no any other state has up to 100 percent of IGR to the federal largesse.
The IGR of the 36 states of the federation totalled N682.67 billion in 2015 as compared to N707.85 billion in 2014, a drop of N25.18 billion or a minus 3.56 percent.
The report provides shocking discovery that indicates that 15 states may go bankrupt and may not stay afloat outside the Federal Account Allocation due to lack of foresight in revenue generation drive coupled with arm-chair governance. The states that may not survive without the Federation Account due to poor internal revenues include Yobe which generated meagre N2.2billion compared to a total of N57.4billion it received from the FAA from June 2015 to May 2016, representing about 3.9 percent.
Others are Zamfara with IGR of N2.7billion compared to FAA of N56.6billion, representing 4.8 percent; Ekiti N3.2billion compared to FAA of N50.460bn representing 6.5 percent; Borno with N3.5bn compared to N78.7bn of FAA representing 4.5 percent and Kebbi with IGR of N3.5bn compared to N64.8billion of FAA, representing 5.5 percent within the period under review.
Other poor internal revenue earners are Taraba which generated N4.1bn compared to FAA of N56billion, representing 6.4 percent; Nassarawa N4.4billion compared to FAA of N50.5billion, representing 8.5 percent; Adamawa N4.4billion compared to FAA of N62.2billion, representing 7.1 percent; Gombe N4.7billion compared to FAA of N49.8billion representing 9.6 percent; Jigawa N5billion compared to FAA of N73billion, representing 7 percent; Bauchi N5.3billion compared to FAA of N72.6bn representing 7.4 percent; Imo N5.4billion compared to FAA of N71.6billion, representing 7.6 percent; Katsina N5.7billion compared to FAA of N88.8billion representing 6.5 percent; Niger N5.9billion compared to FAA of N74.8billion, representing 8 percent and Sokoto N6.2billion compared to FAA of N69.7billion representing 8.9 percent.
Meanwhile, Lagos State retains its number one position in IGR with a total revenue generation of N268.22billion in the twelve months of last year. It is followed by Rivers State N82.10billion, Delta State N40.80billion, Ogun State N34.59billion and Edo state N19.11billion.
However, these five states look good to be on top of the current economic challenges. These are Enugu, Oyo, Anambra, Akwa Ibom and Kano with N18.08billion, N15.66billion, N14.793billion, N14.791billion, and N13.611 billion, respectively.
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 the 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 the Northern States.
Meanwhile, 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. – Economic Confidential
— Jul 11, 2016 @ 01:00 GMT
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