No fewer than 15 States of the Federation may go bankrupt as their Internally Generated Revenues (IGR) in 2015 were far below 10% of their Federation Account Allocations (FAA) in one year from June 2015 to May 2016.
An investigation by the ECONOMIC CONFIDENTIAL further indicates that the IGR of Lagos State of N268bn is higher than that of 32 States combined together excluding Rivers, Delta and Ogun whose IGRs are very impressive. The 32 other states merely generated a total of N257bn in 2015.
Recently the Economic confidential, an economic intelligence magazine published the total allocation each state in Nigeria received from the Federation Account Allocation (FAA) from June 2015 to May 2016 which signified one year of President Muhammadu Buhari’s administration.
The latest report on IGR reveals that only Lagos State generated more revenue than its allocation from the Federation Account by 150% and no any other state has upto 100% of IGR to the federal largesse.
The IGR of the 36 states of the federation totalled N682.67 billion in 2015 as compared to N707.85 billion in 2014, a drop of N25.18 billion or a minus 3.56 percent.
The report provides shocking discovery that indicates that 15 states may go bankrupt and may not stay afloat outside the Federal Account Allocation due to lack of foresight in revenue generation drive coupled with arm-chair governance.
The states that may not survive without the Federation Account due to poor internal revenues include:
- Yobe which generated meagre N2.2b compared to a total of N57.4bn it received from the Federation Account Allocation (FAA) from June 2015 to May 2016 representing about 3.9%
- Zamfara with IGR of N2.7bn compared to FAA of N56.6bn representing 4.8%
- Ekiti N3.2bn compared to FAA of N50.460bn representing 6.5%
- Borno with N3.5bn compared to N78.7bn of FAA representing 4.5
- Kebbi with IGR of N3.5bn compared to N64.8bn of FAA representing 5.5% within the period under review.
- Taraba which generated N4.1bn compared to FAA of N56bn representing 6.4%
- Nassarawa N4.4bn compared to FAA of N50.5bn representing 8.5%
- Adamawa N4.4bn compared to FAA of N62.2bn representing 7.1%
- Gombe N4.7bn compared to FAA of N49.8bn representing 9.6%
- Jigawa N5bn compared to FAA of N73bn representing 7%
- Bauchi N5.3bn compared to FAA of N72.6bn representing 7.4%
- Imo N5.4bn compared to FAA of N71.6bn representing 7.6%
- Katsina N5.7bn compared to FAA of N88.8bn representing 6.5 %
- Niger N5.9bn compared to FAA of N74.8bn representing 8%
- Sokoto N6.2bn compared to FAA of N69.7bn representing 8.9%.
Meanwhile Lagos State retains its number one position in IGR with a total revenue generation of N268.22bn in the twelve months of last year. It is followed by Rivers State N82.10bn, Delta State N40.80bn, Ogun State N34.59bn and Edo state N19.11bn.
However, these five states look good to be on top of the current economic challenges.
They are: Enugu, Oyo, Anambra, Akwa Ibom and Kano with N18.08bn, N15.66bn, N14.793bn, N14.791bn, and N13.611 bn respectively.
The Economic Confidential report further showed that the richest northern state is Kano which is the only state from the North to be among the 10 highest IGR earners while the rest are Southern States. The poorest southern State is Ekiti which is the only state from the South to be among the 10 lowest IGR earners while the rest in the category and bottom of the ladder are Northern 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 revenue that largely come from the oil sector.