The Economic Confidential, the award winning Economic Intelligence Magazine, has released its Annual States Viability Index, which shows that 14 States are insolvent as their Internally Generated Revenues in 2016 were far below 10 per cent of their 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 nonviable and cannot survive.
The IGR are generated by states through Pay-As-You-Earn Tax, Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies.
The report by the economic intelligence magazine further indicated that the IGR of Lagos State of N302 billion is higher than those of 30 States put together, excluding Lagos, Ogun, Rivers, Edo, Kwara and Delta States, whose IGRs are very impressive at more than 30 per cent each.
The 30 other states merely generated a total of N258 billionn in 2016.
Recently, the magazine published the total allocation received by each state in Nigeria from the Federation Account Allocation between January and December 2016.
The latest report on IGR revealed that only Lagos and Ogun States generated more revenue than their allocations from the Federation Account by 169 per cent and 127 per cent respectively and no any other state has up to 100 per cent of IGR to the federal largesse.
The IGR of the 36 states of the federation totalled N801.95 billion in 2016 as compared to N682.67 billion in 2015, an increase of N119.28 billion.
While the report provides shocking discoveries to the effect that 14 states, which have less than 10 per cent IGR, may not stay afloat outside the Federation Account Allocation due to socio-political crises, including insurgency, militancy and herdsmen attacks, others 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 include Borno State, which realized a meagre N2.6 billion, compared to a total of N73.8 billion it received from the Federation Account Allocation in 2016, representing about 4 per cent.
Others are: Ebonyi State, with IGR of N2.3 billion, compared to FAA of N46.6 billion, representing 5 per cent; Kebbi State: N3.1 billion, compared to FAA of N60.88 billion, representing 5.14 per cent; Jigawa State with N3.5 billion compared to N68.52 billion of FAA, representing 5.15 per cent; and Yobe State with IGR of N3.24 billion, compared to N53.93 billion of FAA, representing 6 per cent.
Other poor internal revenue earners are Gombe State, which generated N2.94 billion, compared to FAA of N46 billion, representing 6.26 per cent; Ekiti State N2.99 billion, compared to FAA of N47.56 billion, representing 6.28 per cent; Katsina State N5.54 billion, compared to FAA of N83 billion, representing 6.65 per cent; and Sokoto State N4.54 billion, compared to FAA of N65.97 billion, representing 6.88 per cent.
Meanwhile Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N302 billion, compared to FAA of N178 billion, which translates to 169 per cent in the 12 months of 2016.
It is followed by Ogun State, which generated IGR of N72.98 billion, compared to FAA of N57 billion, representing 127 per cent.
Others with impressive IGR include Rivers State with N85 billion, compared to FAA of N134 billion, representing 63 per cent; Edo State with IGR of N23 billion compared to FAA of N59 billion, representing 38 per cent.
Kwara State however with low receipt from the Federation Account has greatly improved in its IGR of N17 billion compared to FAA of N49 billion, representing 35 per cent, while Delta State had IGR of N44 billion compared to FAA of N126 billion, representing 6.88 per cent.
The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20 per cent.
They are Kwara, Kano, and Kaduna States.
Meanwhile eight states in the South recorded over 20 per cent IGR in 2016.
They are Lagos, Ogun, Rivers, Edo, Delta, Cross River, Enugu, and Oyo States.
The states with the poorest Internally Generated Revenue of less than 10 per cent in the South are Imo, Bayelsa, Ekiti and Ebonyi States, while in the North there are Niger, Nasarawa, Sokoto, Katsina, Gombe, Yobe, Jigawa, Kebbi and Borno 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, the influential magazine rreported
The table on the Ranking of IGR of States in 2016 compared to their Federation Account Allocations with the percentages is available at: https://economicconfidential.com/financial/facts-a-figures/asvi-lagos-igr-30-states/
Economic Confidential is a sister publication of PRNigeria, the Press Release Platform.