The Economic Confidential has released its Annual States Viability
Index (ASVI) which shows that 17 states are insolvent as their
Internally Generated Revenues (IGR) in 2017 were far below 10 per cent
of their receipts from the Federation Account Allocations (FAA) in the
The index proved that without the monthly disbursement from the
Federation Account Allocation Committee (FAAC), many states remain
unviable, and cannot survive without the federally collected revenue,
mostly from the oil sector.
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 report by this economic intelligence magazine further indicates
that the IGR of Lagos State of N333 billionn is higher than that of 30
States put together whose internal revenues are extremely low and poor
compared to their allocations from the Federation Account.
The states with impressive over 30 per cent IGR apart from Lagos are
Ogun, Rivers, Edo, Kwara, Enugu and Kano states who generated N607
billion in total, while the remaining states merely generated a total
of N327 billion in 2017.
Recently the magazine published the total allocations received by each
state in Nigeria from the Federation Account Allocation (FAA) between
January to December 2017. The latest report on IGR reveals that only
Lagos and Ogun States generated more revenue than their allocations
from the Federation Account by 165 per cent and 107 per cent
respectively and no any other state has up to 100 per cent of IGR to
the federal largesse.
The IGR of the 36 states of the federation totalled N931bn in 2017 as
compared to N801.95 billion in 2016, an increase of N130 billion.
From the report, the states with less than 10 per cent IGR have jumped
to 17 from 14 states in the previous year 2016. The poor states may
not stay afloat outside the Federation Account Allocation due to
socio-political crises including insurgency, militancy, armed-banditry
and herdsmen attacks. Other states lack foresight in revenue
generation drive coupled with arm-chair governance.
The states that may not survive without the Federation Account due to
poor internal revenue generation are Bauchi which realised a meagre
N4.3 billion compared to a total of N85 billion it received from the
Federation Account Allocation (FAA) in 2017 representing about 5 per
cent; Yobe with IGR of N3.59 billion compared to FAA of N67 billion
representing 5.33 per cent; Borno N4.9 billion compared to FAA of N92
billion representing 5.41 per cent; Kebbi with IGR of N4.39 billion
compared to N76 billion of FAA representing 5.77 per cent and Katsina
with IGR of N6 billion compared to N103 billion of FAA representing
5.8 per cent within the period under review.
Other poor internal revenue earners are Niger which generated N6.5
billion compared to FAA of N87 billion representing 7.43 per cent;
Jigawa N6.6 billion compared to FAA of N85 billion representing 7.75
per cent; Imo N6.8 billion compared to FAA of N85 billion representing
8.1 per cent and Akwa Ibom N15 billion compared to FAA of N197 billion
representing 8.06 per cent, Ekiti N4.9 billion compared to FAA of N59
billion representing 8.38 per cent; Osun N6.4 billion compared to FAA
of N76 billion representing 8.45 per cent, Adamawa N6.2 billion
compared to FAA of N72.9 billion representing 8.49 per cent; Taraba
N5.7 billion compared to FAA of N66 billion representing 8.70 per cent
and Ebonyi N5.1 billion compared to FAA of N57.8 billion representing
8 per cent.
Meanwhile, Lagos State remained steadfast in its number one position
in IGR with a total revenue generation of N333 billion compared to FAA
of N201 billion which translate to 165 per cent in the twelve months
of 2017. It is followed by Ogun State which generated IGR of N74.83
billion compared to FAA of N69 billion representing 107 per cent.
Others with impressive IGR include Rivers with N89 billion compared to
FAA of N178 billion representing 50 per cent; Edo with IGR of
N25billion compared to FAA of N75 billion representing 33 per cent.
Kwara State however with a low receipt from the Federation Account has
greatly improved in its IGR of N19 billion compared to FAA of N61
billion representing 32 per cent while Enugu with IGR of N22 billion
compared to FAA of N69 billion representing 32 per cent. Kano
generated N42 billion compared to FAA of N143 billion representing 30
per cent while Delta State earned N51 billion IGR against FAA of N175
billion representing 29 per cent.
Economic Confidential Annual State Viability Index (ASVI) 2017
Ranking of States by Internally Generated Revenue (IGR) Compared to
Federation Account Allocation (FAA) in 2017
Table computed and designed by the Economic Confidential Magazine
Table – Economic Confidential Annual State Viability Index ASVI 2017
The Economic Confidential ASVI further showed that only three states
in the entire Northern region have IGR above 20 per cent. They are
Kwara, Kano, and Kaduna States. Meanwhile ten states in the South
recorded over 20 per cent IGR in 2017. They are Lagos, Ogun, Rivers,
Edo, Enugu, Delta, Cross River, Anambra, Oyo and Abia States.
The states with the poorest Internally Generated Revenue of less than
10 per cent in the South are Bayelsa, Ebonyi, Osun, Ekiti, Akwa-Ibom
and Imo States while in the North we have Gombe, Zamfara, Taraba,
Adamawa, Jigawa, Niger, Katsina, Kebbi, Borno, Yobe and Bauchi 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 revenues that largely
come from the oil sector.