States’ IGR performance is disgraceful

Latest figures on the internally generated revenue takings of the 36 states released by the National Bureau of Statistics reveal their continued under-performance and dependence on monthly allocations for sustenance.

The report showed that the 36 states and the Federal Capital Territory combined, generated N1.92 trillion in 2022, while they received N3.24 trillion from the Federation Account Allocation Committee. This template entrenches poverty and should be urgently reversed. The report showed that compared to the N1.89 trillion IGR recorded in 2021, the 2022 figure indicates a sluggish growth of just 2.0 per cent year-on-year.

It also revealed that 31 states relied overwhelmingly on federal allocations for survival. Without them, many states would be totally bankrupt. This violates the basic principle of federalism that is anchored on autonomous, self-reliant, and self-sufficient units aggregating for the common defence, immigration, and customs services.

Lagos State, as usual, had the highest IGR with N651.15 billion, representing 34 per cent of the total; followed by Rivers with N172.8 billion, and the FCT with N124 billion. Ogun and Delta followed with N120.6 billion, and N85.9 billion respectively.

The four least performing states were Kebbi, with N9.15 billion, Taraba with N10.24 billion, Yobe 10.46 billion, and Ebonyi with N12.4 billion.

Only five states relied on their internal revenue and federal allocations. These are Kaduna, Kwara, Lagos, Ogun, Oyo; the FCT also did well. Shamelessly, the others depend overwhelmingly on FAAC.

The absurdity is underlined by the fact that oil and gas revenues account for a major chunk of distributable accruals when only nine states are oil-bearing states.

This fiscal arrangement celebrates indolence and dependency and arrests development. All states have potential in agriculture and mining and human capital. For Nigeria to maximise her potential, states must be become productive and self-sufficient.

The population is growing at an annual rate of 2.6 per cent while GDP is forecast to grow by only 2.1 per cent this year and a modest 3.2 per cent in 2024 by the IMF. The jobless rate of 33.3 per cent is believed to be understated and is about 53.4 per cent in the youth segment.

Nigeria needs to make the hard but necessary choices. It must be run as a true federation of autonomous, productive units. This way, the states will drive investment, jobs, and wealth-creation to reverse the prevailing poor human development indices. In the First Republic, the regions drove Nigeria’s development. They were the drivers of agriculture, mining, industrialisation, infrastructure, and social services. They were self-sufficient.

The governors need to implement comprehensive economic policies. Most importantly, states should wean themselves off the dependence on federal sharing. While spearheading the campaign to replace the 1999 Constitution, they should take advantage of the partly liberalised solid minerals and power sectors to promote investments, stimulate productive activities.

Nevada, an arid American state, opted to develop itself into a national and global gambling and entertainment centre as its revenue from mining fell. Statista said its revenue from casino gaming peaked at $11.6 billion 2018.

Nigeria’s states should concentrate on rural infrastructure and agriculture. This will empower the farmers, reverse the high rural-urban migration, and lift farmers out of poverty. Every state should plug leakages and prune the cost of governance. The governors should press for the repeal of the constraining Railways Act 1955 to attract investment in rail transportation.

They should create investment-friendly environments and promote private sector-led economies with MSMEs and start-ups as the fulcrum. The IGR position is dismal; the states must strive for a radical change.

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