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Seven states, led by Katsina, are insolvent as their Internally Generated Revenue (IGR) in 2019 were below 10 percent of their total federal allocation in the same year. This is contained in the Annual States Index (ASVI) released by Economic Confidential, a publication of PRNigeria on Sunday.
IGR is generated through Pay-As-You-Earn tax (PAYE), direct assessment, road taxes and revenues from Ministries, Departments and Agencies (MDAs).
Last year, the ASVI revealed that only 10 Nigerian States were financially strong.
The latest index shows that without the monthly disbursement from the Federation Account Allocation (FAA), many states would be unviable, just as it put the IGR generated by the 36 states at N1.3trillion in 2019, compared to N1.1trillion in 2018.
Lagos State IGR of N398bn in 2019 was higher than 20 States’ IGR combined, thus maintaining its number one position. Lagos received N270billion FAA, meaning its IGR (147 percent) was more.
In the year under review, the Federal Capital Territory (FCT) Abuja generated N74billion against N30billion FAA.
Ogun State generated N70.92billion IGR compared to N92billion FAA -representing 77 percent; Rivers generated N140billion against N219billion FAA – representing 64 percent; Kwara State generated N30billion compared to N80billion FAA – representing 38 percent.
Kaduna State raked in N44billion compared to N129billion FAA – representing 35 percent; Enugu State earned N31billion against N103billion FAA – representing 29 percent; Ondo State generated N30billion compared to N103billion FAA – representing 29 percent.
Edo State generated N29billion compared to N108billion FAA – representing 27 percent; Anambra State generated N26billion against N98billion FAA – representing 27 percent; Cross River State generated N22billion compared to N99billion FAA – representing 25 percent.
The report shows that in 2019, 10 states generated N894billion IGR, while the remaining 26 states generated N440billion, confirming that most states have improved their IGR as only seven generated less than 10 percent, against 17 states in 2018.
For the weak seven states, Katsina, the home state of President Muhammadu Buhari, tops the list. It generated N8billion IGR compared to N136billion FAA – representing six percent.
Kebbi State generated N7.3billion compared to N100billion FAA – representing seven percent; Borno State generated N8billion against N121billion FAA – representing seven percent; Taraba State generated N6.5billion compared to N86billion FAA – representing eight percent.
Bayelsa, the home state of former President Goodluck Jonathan, generated N16billion compared to N176billion FAA – representing nine percent; Yobe State generated N8.4billion against N88billion FAA – representing nine percent; Gombe State generated N6.8billion compared to N75billion FAA – representing 7.5 percent.
While the report identified insurgency, kidnapping, banditry and herdsmen-farmers clashes, as some of the reasons for low income and investors’ fear, the poor states were advised to formulate initiatives for revenue generation.
Only three states in the North earned above 20 percent IGR, while 10 states in the South recorded likewise. They are Lagos, Ogun, Rivers, Enugu, Ondo, Edo, Delta, Anambra, Cross River and Delta.