31 states survived on federal allocation, generated low IGR in 2022

THIRTY-ONE states in Nigeria relied more on the Federal Government’s allocation for survival than the revenue they generated in 2022, analysis by The ICIR Data evaluating the Federal Government’s allocations and the internally generated revenue (IGR), by the 36 states and the Federal Capital Territory (FCT) showed.

The ICIR checks showed that the total amount disbursed by the Federal Account Allocation Committee (FAAC) to the states is N3.24 trillion, while the IGR generated by the states, according to the National Bureau of Statistics (NBS), is N1.93 trillion.

This puts the total revenue received at N5.17 trillion in 2022.

The ICIR reported how three states pulled nearly half of the total IGR generated that year. 

According to data from NBS, in 2022, Lagos State, Rivers State and the FCT generated the highest revenue with N651.15 billion, N172.82 billion and N124.37 billion, respectively, while, the lowest three performing states during the year were Kebbi, Taraba and Yobe with values of N9.15 billion, N10.24 billion and N10.46 billion respectively.

However, a closer check of the FAAC data showed that only six states relied on their internal revenue and the Federal Government allocations.

The states are Kaduna, Kwara, Lagos, Ogun, Oyo and the FCT.

To analyse this, The ICIR filtered the reliance on the government allocation by 60 per cent and IGR by 40 per cent. 

StatesIGR ratio (%)FAAC ratio(%)
Kaduna4555
Kwara4555
Lagos8020
Ogun7426
Oyo4654
FCT (Abuja)6040

Economists, who spoke to The ICIR expressed concern that more states are becoming mere consumption centres and relying on federation allocation for survival.

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“One of the major weaknesses in our current democracy is the poor economic performance of states and local governments. The states in Nigeria, excluding three or four, are mere consumption centres. They don’t create wealth and add value. They just go to Abuja, collect the allocation,” a development economist, Chuka Mbonu, told The ICIR in an interview.

He said “The IGR comes from payroll taxes from companies working in states. This means, states should have economic activities that bring in such funds. Low IGR means most states don’t have appreciable economic activities. If states don’t have investments, how would they improve their IGR and solve issues like maternal and infant mortality?”

In a similar submission, the chief executive officer, Economic Associates, Ayo Teriba, said that states needed to do more to attract investments and create wealth opportunities for citizens.




     

     

    “States must have investment portal and work closely with the Private Sector for wealth creation.”

    Meanwhile, of the six states, only Lagos, Ogun, and the FCT depended more on their revenue than the Federal Government allocation. This means that the amount generated as revenue was higher than what was received from the government. 

    On the other hand, of the 31 states that relied more on the federal government allocation, nine states had a revenue ratio below 20 per cent while the federal government shouldered 80 per cent. 

    The least was Bayelsa state, followed by Akwa Ibom and Kebbi states.

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    StatesIGR ratio(%)FAAC ratio(%)
    Adamawa1882
    Akwa Ibom1189
    Bayelsa694
    Ebonyi1981
    Kebbi1387
    Taraba1783
    Yobe1684

    Kehinde Ogunyale tells stories by using data to hold power into account. You can send him a mail at [email protected] or Twitter: Prof_KennyJames

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

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