The Economic Confidential has released the Annual States Viability Index.
The report shows 17 States are insolvent as their Internally Generated Revenues in 2018 were far below 10 per cent of their receipts from the Federation Account Allocations in the same year.
The index, carefully and painstakingly computed, proved that without the monthly disbursement from the Federation Account Allocation Committee, many states remain unviable and cannot survive without the federally collected revenue, mostly from the oil sector.
The IGR are generated by states through Pay-As-You-Earn Tax, Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies.
The IGR of the 36 states of the federation totalled N1.1 trillion in 2018 as compared to N931 billion in 2018, an increase of N172 billion.
The report by this economic intelligence magazine further indicated that the IGR of Lagos State of N382 billion is higher than that of 30 States put together, whose Internally Generated Revenues are extremely low and poor compared to their allocations from the Federation Account.
Meanwhile, the Federal Capital Territory, Abuja, which is not a state but the nation’s capital, generated N65 billion IGR against N29 billion from the Federation Account in the same period.
Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N382 billion compared to FAA of N260 billion, which translates to 146 per cent in the 12 months of 2018.
It is followed by Ogun State, which generated IGR of N84.55 billion compared to FAA of N93 billion, representing 90%; Rivers with N112 billion compared to FAA of N237 billion, representing 47%; and Kwara State with a low receipt from the Federation Account has maintained its impressive IGR by generating N23 billion compared to FAA of N81 billion, representing 28%.
Others with impressive IGR include Edo with IGR of N28 billion compared to FAA of N112 billion, representing 25%; Kano generated N44 billion compared to FAA of N183 billion, representing 24%; Enugu with IGR of N22 billion compared to FAA of N92 billion, representing 23%; Ondo with IGR of N24 billion compared to FAA of N108 billion, representing 22.77%; Kaduna with IGR of N29 billion compared to FAA of N131 billion, representing 22..44%; while Delta State earned N58 billion IGR against FAA of N285 billion, representing 20%.
The 10 states with impressive IGR generated N808 billion in total, while the remaining states merely generated a total of N295 billion in 2018.
While the report provides shocking discoveries, the states with less than 10 per cent IGR have remained 17 as in the previous year 2017.
The poor states may not stay afloat outside the Federation Account Allocation due to socio-political crises, including insurgency, kidnapping, armed-banditry and herdsmen-farmer clashes.
Other states lack foresight in revenue generation drive, coupled with arm-chair governance.
The states that may not survive without the Federation Account due to poor internal revenue generation are Ebonyi, which realised a meagre N6.14 billion compared to a total of N76 billion, it received from the Federation Account Allocation in 2018, representing about 7.98%; Bayelsa with IGR of N13.6 billion compared to FAA of N192 billion, representing 7.10%; Taraba N5.96 billion compared to FAA of N88 billion, representing 6.77%; Adamawa with IGR of N6.2 billion compared to N97 billion of FAA, representing 6.77%; and Borno with IGR of N6.52 billion compared to N122 billion of FAA, representing 5.3%.
The major poor internal revenue earners are Katsina, which generated N6.9 billion compared to FAA of N138 billion, representing 5.03%; Yobe N4.48 billion compared to FAA of N89 billion, representing 4.86%; and lastly Kebbi N4.88 billion IGR compared to FAA of N101 billion, representing 4.88%.
The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20 per cent in comparison to their respective allocations from the Federation Account.
They are Kwara, Kano and Kaduna States.
Meanwhile seven states in the South recorded over 20 per cent IGR in 2018.
They are Lagos, Ogun, Rivers, Edo, Enugu, Ondo and Delta States.
The four Southern states with the poorest Internally Generated Revenue of less than 10 per cent compared to their FAA in 2018 are Akwa Ibom, Ekiti, Ebonyi and Bayelsa.
Similarly, 13 Northern States have poorest IGR, namely: Benue, Nasarawa, Gombe, Zamfara, Niger, Bauchi, Jigawa, Taraba, Adamawa, Borno, Katsina, Yobe and Kebbi 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 revenues that largely come from the oil sector.
Note: Economic Confidential is a sister publication of PRNigeria.