By Jeph Ajobaju, Chief Copy Editor
Lagos has retained its perch on the Internally Generated Revenue (IGR) leader board with a 5.08 per cent growth in 2020, according to latest data compiled by BudgIT, which shows reduction in combined states’ figures.
Eighteen states recorded a slide in IGR. At the bottom are Jigawa, Delta, Benue, Taraba, and Bayelsa.
The “State of States’ Report” by the civic organisation noted that Rivers topped the overall 2021 Fiscal Performance Ranking but only three states can fund expenditures from revenues.
“Economic shocks from the COVID-19 pandemic took a toll on states’ IGR and their share of federally collected revenue in 2020. Cumulatively, all 36 states saw a 3.43 per cent decline in their IGR from N1.26 trillion in 2019 to N1.21 trillion in the year 2020 under review,” BudgIT said, per reporting by Vanguard.
“In total, 18 states saw a decline in their year-on-year [YoY] IGR while 18 other states could weather the fiscal storm induced by the pandemic, growing their revenue — in some cases by as high as 87.02 per cent.
“Worthy of note is Lagos State, which despite being the epicentre of the pandemic, saw a 5.08 per cent growth in its IGR, a testament to the resilience of its fiscal strategy.
“Rivers State once again topped the overall 2021 Fiscal Performance Ranking despite COVID-19 induced fiscal shocks to its IGR, indicating that the fiscal fundamentals of this state, compared to others in the country, are more prudently managed.
“Two states made it, as new entrants to the Top 5 category in the overall 2021 ranking – Ebonyi State emerged in 2nd position; up from 6th position in 2020 ranking, and Kebbi State emerged in 5th position, up from 11th position in 2020.
“In the 2021 Performance Ranking, two states dropped out of the Top 5 in overall ranking; Ogun State (now 19th) and Kano State (now 22nd), due to a sharp decline in their IGR in 2020.
BudgIT stressed that only three states can meet their operating expenses obligations with a combination of IGR and Value Added Tax (VAT) – Lagos, Rivers, and Anambra.
“In contrast, states at the bottom of the ranking need to do more to rapidly consolidate on any ongoing strategies to improve their IGR and by extension, their viability as federating entities.
“This is necessary considering the comparative size of their operating expenses and the global push to transition away from fossil fuels like crude oil, a key source of federally distributed revenue.
“These states at the bottom ranking include Jigawa, Delta, Benue, Taraba and Bayelsa.”
States garner N1.31tr IGR, Lagos tops with N418.99b
All the 36 states and the Federal Capital Territory (FCT) made N1.31 trillion as IGR in 2020 with Lagos topping the table with N418.99 billion, and aiming higher with N60 billion monthly IGR this year.
A report by the National Bureau of Statistics (NBS) shows that states’ IGR declined 1.93 per cent, from N1.33 trillion in 2019 to N1.31 trillion in 2020. But it rose 11.7 per cent compared to N1.69 trillion in 2018.
The decline is partly attributed to the pandemic which forced lockdown to curb the spread of the virus.
IGR by state
States generated N1.09 trillion from taxes in 2020, accounting for 83.3 per cent of total IGR. Tax revenue declined 2.25 per cent to N1.11 trillion compared to 2019.
Lagos recorded the highest IGR of N418.99 billion or 32.1 per cent of the total N1.31 trillion, followed by Rivers (N117.19 billion), FCT (N92.06 billion), Delta (N59.73 billion), and Kaduna (N50.75 billion).
Kebbi had the highest YoY growth of 87.02 per cent, next Ebonyi (87.3 per cent), Oyo (42.23 per cent), Borno (41.63 per cent), and Katsina (34.16 per cent).
Benue recorded the highest YoY decline (41.38 per cent), followed by Sokoto (37.93 per cent), Kwara (36.03 per cent), Jigawa (32.95 per cent), and Ogun (N28.44 per cent).
States recorded the highest quarterly IGR in Q1 2020 before the coronavirus lockdown in March. It dipped 25.53 per cent to N269.88 billion in Q2 2020.
They generated N338.57 billion in Q3 2020 but saw a decline in Q4 2020 to N335.25 billion.
Nigeria went into recession in Q3 2020 but recovered in Q4 2020.