ASVI 2018: States Generate N1.1trillion, Only 10 Economically Viable, 17 States are Insolvent News

ASVI 2018: States

ASVI 2018: States Generate N1.1trillion, Only 10
Economically Viable, 17 States are Insolvent
… Lagos Generates More IGR than 30 States Combined
…. Economic Viable States: Lagos, Ogun, Rivers, Kwara, Enugu
… Poor IGR States: Kebbi, Yobe, Katsina, Bayelsa, Ebonyi

The Economic Confidential has released the Annual States
Viability Index ( ASVI) for which shows that seventeen (17) States
are insolvent as their Internally Generated Revenues (IGR) in 2018
were far below 10% of their receipts from the Federation Account
Allocations (FAA) in the same year.

The index carefully and painstakingly computed proved that
without the monthly disbursement from the Federation Account
Allocation Committee (FAAC), 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
(PAYE), Direct Assessment, Road Taxes and revenues from Ministries,
Departments and Agencies (MDA)s.

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 indicates that the IGR of Lagos State of N382bn 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 N65bn IGR against N29bn
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 N382bn compared to FAA of N260bn
which translate to 146% in the twelve months of 2018. It is
followed by Ogun State which generated IGR of N84.55bn compared to
FAA of N93bn representing 90%; Rivers with N112bn compared to FAA
of N237bn representing 47% and Kwara State with a low receipt from
the Federation Account has maintained its impressive IGR by
generating N23bn compared to FAA of N81bn representing 28%.

Others with impressive IGR include Edo with IGR of N28bn
compared to FAA of N112bn representing 25%; Kano generated N44bn
compared to FAA of N183bn representing 24%; Enugu with IGR of N22bn
compared to FAA of N92bn representing 23%; Ondo with IGR of N24bn
compared to FAA of N108bn representing 22.77%; Kaduna with IGR of
N29bn compared to FAA of N131bn representing 22.44% while Delta
State earned N58bn IGR against FAA of N285bn representing 20%.

The ten states with impressive IGR generated N808bn in total,
while the remaining states merely generated a total of N295bn in
2018.

While the report provides shocking discoveries, the states with
less than 10% 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 realized a
meagre N6.14bn compared to a total of N76bn it received from the
Federation Account Allocation (FAA) in 2018 representing about
7.98%; Bayelsa with IGR of N13.6bn compared to FAA of N192bn
representing 7.10%; Taraba N5.96bnbn compared to FAA of N88bn
representing 6.77%; Adamawa with IGR of N6.2bn compared to N97bn of
FAA representing 6.77% and Borno with IGR of N6.52bn compared to
N122bn of FAA representing 5.3% within the period under review.

The major poor internal revenue earners are Katsina which
generated N6.9bn compared to FAA of N138bn representing 5.03%; Yobe
N4.48bn compared to FAA of N89bn representing 4.86% and lastly
Kebbi N4.88bn IGR compared to FAA of N101bn representing 4.88%.

The Economic Confidential ASVI further showed that only three
states in the entire Northern region have IGR above 20% 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% 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% 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.

The Table: 2018 State Viability Index
ASVI:^[1]

Previous Tables:
Economic Confidential ASVI:
2017
Economic Confidential ASVI:
2016^[2][3]