The latest Internally Generated Revenue (IGR) report released by the National Bureau of Statistics, revealed that 36 states and the Federal Capital Territory, generated a sum of N1.33 trillion in 2019, a 14.1% increase compared to N1.17 trillion generated in 2018.
According to the report, 83.4% (N1.11 trillion) of the generated revenue was in form of taxes, while 16.6% (221.56 billion) was from MDAs’ revenue.
The report showed that 33 states, including Abuja, recorded positive growth in revenue, while 4 states generated less in 2019 compared to 2018.
- Lagos state maintains its position as the commercial hub of Nigeria as it contributed 29.9% (N398.73 billion) to the total states’ IGR.
- Rivers state followed, having generated a sum of N140.4 billion, thereby contributing 10.5% to the total revenue generated.
- The Federal Capital Territory ranked third as it generated N74.56 billion (5.6%) internally.
- Other states with the biggest IGR for 2019 include Ogun (N70.9 billion), Delta (N64.7 billion), Kaduna (N44.9 billion), Kano (N40.6 billion) as well as Akwa Ibom. Enugu and Kwara states followed with N32.3 billion, N31.1 billion and N30.6 billion respectively.
Yobe, Zamfara, Osun, others record highest growth in IGR
While Lagos and Rivers states dwarfed others in revenue generation, Yobe, Zamfara, and Osun states recorded the highest positive growth in IGR for the year ended 2019.
- Yobe state recorded the highest rise in IGR between 2018 and 2019 as the revenue grew by 92.7% from N4.38 billion to N8.44 billion.
- Zamfara and Osun states followed with respective growths of 87.85% and 72.64%. Specifically, Zamfara state grew its revenue from N8.2 billion to N15.4 billion, while Osun IGR rose from 10.4 billion in 2018 to N17.9 billion in 2019.
- Other states that significantly grew their IGR include Benue, Adamawa and Kaduna, having grown their revenue by 59.2%, 56.4%, and 52.7% respectively.
Revenue drought amidst COVID-19 pandemic
As the confirmed cases of COVID-19 in Nigeria continue to increase by the day, having spread across 34 states of the federation, and forcing a partial shutdown of the economy, the country faces a possible recession in 2020.
Recall that IMF earlier predicted that Nigeria’s economy would slide by 3.4% in 2020 and the Finance Minister recently admitted that the crash in crude prices would negatively affect the country’s revenue and foreign exchange earnings.
The internally generated revenue serves a major source of revenue for most states, but with the decline in economic activities during the pandemic, there is a major concern as to how most states will be able to manage their affairs.
Meanwhile, many states and local governments depend on monthly statutory allocations from the central vault to carry out their businesses, and as the country’s revenue is expected to decline, the FAAC allocations to states will also reduce.
The big question is how will the states fare amidst COVID-19 pandemic.