Three out of the 36 states of the country– Lagos, Rivers and Delta – and the Federal Capital Territory (FCT) generated 54.7 per cent of the N612.9 billion states raised as internally generated revenues (IGRs) in the first half of the year.
According to a report released by the National Bureau of Statistics (NBS), Lagos alone generated 33.37 per cent (amounting to N204.5 billion) of the amount to maintain its lead on the list.
The figure accounted for 80.34 per cent of the total revenue available for the state in the two quarters. With the performance, Lagos stands out as the only state whose IGR in the period exceeded 60 per cent of its total accruable revenue.
On the average, IGRs share of total state revenues was 35.34 per cent while Federal Account Allocation Committee (FAAC) allocation cleared the 64.66 per cent (1.12 trillion) balance, reinforcing the historical dependence of states on the centre for survival.
Rivers came a distant second to Lagos with a 10.54 per cent (N64.6 billion) share of the total revenue mobilised. FCT generated N35.2 billion (translating to 5.74 per cent) while Delta took the fourth position, having realised N30.8 billion or 5.03 per cent of the total figure.
On the flip side, Jigawa State generated N3 billion within the period to lead states with weakest revenue capacity. Yobe, Niger and Taraba states are in the laggard category with IGRs of N3.9 billion, N4 billion and N4.1 billion respectively.
ONLY Lagos, FCT and Ogun IGR percentage share of the total revenue exceeded 50 per cent. The shares of IGRs of Bayelsa, Jigawa and Niger in half year’s total revenues were 7.52 per cent, 10.06 per cent and 13.37 per cent respectively.
According to the report, pay as your earn (PAYE), direct assessment, road taxes, other taxes and ministry/departments/agency revenues are the components of states’ IGRs.
A total of N418.2 billion, which translates to 68 per cent of the amount raised, was realised from PAYE. Road and other taxes contributed N94.2 billion (15.4 per cent) while incomes from MDAs totalled N84.1 billion or 13.7 per cent.
Last year, the total IGRs realised by the 36 states and FCT was N1.3 trillion. The three most viable states – Lagos, Rivers and Delta – and FCT contributed 51 per cent to the figure.
The half-year 2020 poor revenue profiles of the states reflect a historical pattern that has become part of a system that deprives the federating states an opportunity to assert themselves financially.
States have come under severe criticism for waiting to be spoon-fed by the centre rather than engaging in entrepreneurial programmes to boost their revenue generation.
IN response, states have demanded more power to control their resources.
Civil society organisations have also joined the clamour for resource control, demanding an arrangement that would cede more power to states to take responsibility for their natural resources, generate revenues and pay taxes to the Federal Government as practised by other federal systems.
The IGRs distribution seems to have a positive correlation with bank credit spread by states. A new survey released by NBS says Lagos took N14.9 (79 per cent) out of the total N18.9 trillion bank credit distribution among states as of June this year. Rivers retained N861 billion; FCT had N564 billion while N217 billion went to Delta businesses and individuals.
Even Kano State, the second most commercially active hub after Lagos, retained only N177 billion (less than a per cent of the entire credit granted by banks).
“Credit by states stood at N18.90 trillion compared to N18.56 trillion in Q1 2020 and N15.44 trillion in Q2 2019. This represents 1.82 per cent increase in credit quarter-on-quarter and 22.38 per cent year-on-year.
Lagos State recorded the highest credit by geographical distribution with N14.92 trillion, accounting for 78.94 per cent while Yobe recorded the least with N13.8 billion, accounting for 0.07 per cent in Q2 2020,” NBS said in the executive summary of the report.
