Three out of the 36 states of the country– Lagos, Rivers, and Delta – and the Federal Capital Territory (FCT) generated 54.7 percent 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 percent (amounting to N204.5 billion) of the amount to maintain its lead on the list.
The figure accounted for 80.34 percent 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 percent of its total accruable revenue.
On average, IGRs share of total state revenues was 35.34 percent while Federal Account Allocation Committee (FAAC) allocation cleared the 64.66 percent (1.12 trillion) balance, reinforcing the historical dependence of states on the center for survival.
Rivers came a distant second to Lagos with a 10.54 percent (N64.6 billion) share of the total revenue mobilized. FCT generated N35.2 billion (translating to 5.74 percent) while Delta took the fourth position, having realized N30.8 billion or 5.03 percent 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 percent. The shares of IGRs of Bayelsa, Jigawa, and Niger in half year’s total revenues were 7.52 percent, 10.06 percent, and 13.37 percent 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 percent of the amount raised, was realized from PAYE. Road and other taxes contributed N94.2 billion (15.4 percent) while incomes from MDAs totaled N84.1 billion or 13.7 percent.
Last year, the total IGRs realized by the 36 states and FCT was N1.3 trillion. The three most viable states – Lagos, Rivers, and Delta – and FCT contributed 51 percent 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 center rather than engaging in entrepreneurial programs to boost their revenue generation.
IN response, states have demanded more power to control their resources.
Civil society organizations have also joined the clamor 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 practiced 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 percent) 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 percent 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 a 1.82 percent increase in credit quarter-on-quarter and 22.38 percent year-on-year.
Lagos State recorded the highest credit by geographical distribution with N14.92 trillion, accounting for 78.94 percent while Yobe recorded the least with N13.8 billion, accounting for 0.07 percent in Q2 2020,” NBS said in the executive summary of the report.