•rich, economic viable states: Lagos, Ogun, River, Kaduna, Kwara, Oyo and Edo
•insolvent, poor IGR states: Bayelsa, Kebbi., Katsina, Akwa-Ibom, Taraba and Yobe
The Economic Confidential has released its 7th Annual States Viability Index (ASVI) which shows that six states are insolvent as their Internally Generated Revenues (IGR) in 2022 were below 10 percent of their receipts from the Federation Account Allocations Committee (FAAC) in the same year.
The index, which was carefully computed proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states will remain unviable, and cannot survive without the federally collected revenue, mostly from the oil receipts.
The IGR are generated by states through Pay-As-You-Earn Tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDA)s.
The total IGR of the 36 states of the federation was N1.8 trillion in 2022, above that of 2021 which was N1.76 trillion.
The report by the Economic Confidential, an intelligence magazine, which was made known on Monday in Abuja further indicates that the IGR of Lagos State was N651 billion in 2022.
This 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.
Lagos remained steadfast in its number one position in IGR among the states with a total revenue generation of N651 billion compared to FAAC earnings of N370 billion which translates to 176 percent in the 12 months of 2022.
According to the report, Ogun State, which generated an IGR of N120 billion compared to its FAAC of N113 billion representing 106 percent, followed by Rivers which generated N172 billion IGR compared to FAAC earnings of N363 billion representing 48 percent.
Kaduna State generated N58 billion compared to FAAC earnings of N155 billion representing 37 percent; Kwara had IGR of N35 billion compared to FAAC earnings of N99 billion representing 36 percent and Oyo State generated N62 billion compared to FAAC earnings of N181 billion representing 34 percent and Edo generated N47 billion IGR compared to N147 billion FAAC earnings representing 32 percent.
The report says that the total internally generated revenues of N1.15 trillion from the seven most viable states in 2022 was almost twice the total IGR of 29 remaining states put together merely generating about N650 billion.
Others with impressive IGRs include Anambra with IGR of N33 billion compared to FAAC earnings of N127 billion representing 27 percent; Enugu with IGR of N28 billion compared to FAAC earnings of N111 billion representing 26 percent; Ondo with IGR of N32 billion compared to FAAC earnings of N135 billion representing 24 percent while Nasarawa State earned N19 billion IGR against FAAC earnings of N92 billion representing 21 percent.
Delta State generated N85 billion IGR against its receipt of N428 billion from FAAC representing 20 percent, and Osun State had an IGR of 24 billion compared to its FAAC earnings of N122 billion representing 20 percent.
Explaining further, Abdulrahman Abdulraheem, Managing Editor of Economic Confidential said, “The report says the six States with impressive IGR generated N225 bn in total, while the remaining 23 states generated a total of N426bn in 2022.”
The report provides an amazing discovery. While some states have improved their IGR compared to previous years, others performed poorly. In 2022, six states generated less than 10 percent IGR compared to two states in 2021.
Adamawa narrowly escaped as it generated N13.1 billion compared to FAAC earnings of N116 representing 11.29 percent in 2022 which was less than 2 percent over its 13 percent last year.
The six states that may not survive without the Federation Account due to their extremely poor internal revenue generation of less than 10 percent compared to their federal allocations are Bayelsa, Katsina and Akwa Ibom the home states of former Presidents Goodluck Jonathan, Muhammadu Buhari and the current Senate President Godswill Akpabio respectively.
Others are Taraba, Yobe and Kebbi states.
The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20 percent in comparison to their respective allocations from the Federation Account. They are Kaduna, Kwara and Nasarawa States in that order.
Abdulrahman Abdulraheem
Managing Editor Economic Confidential said, “Meanwhile, eight states in the South recorded over 20% IGR in 2022. They are Lagos, Ogun, Rivers, Oyo, Edo, Anambra, Enugu and Ondo.
“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”.
Meanwhile, the IGR of the respective states can improve through aggressive diversification of the economy to productive sectors rather than relying solely on the monthly Federation Account revenues that largely come from the oil sector.
The poor states with lower IGR may not stay afloat outside the monthly allocations from the Federation Account due to a lack of initiatives for revenue generation drive coupled with arm-chair governance.
Some of the States cannot attract investors due to socio-political and economic crises including insurgency, kidnapping, armed banditry, and herdsmen-farmers clashes.
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