Economic shocks from the COVID-19 pandemic took a toll on states’ Internally Generated Revenue (IGR) and their share of federally collected revenue in 2020, pushing their cumulative IGR down by 3.43 percent, except for Lagos State that recorded 5.08 percent IGR growth in the period.
This was disclosed in State of States report by BudgIT, a civic organization.
In its “State of States Report 2021 released yesterday, BudgIT noted that Rivers State topped the overall 2021 Fiscal Performance Ranking, while adding that only three states in the country can meet their operating expenses obligations from their revenues.
The BudgIT report stated: “Economic shocks from the COVID-19 pandemic took a toll on states’ IGR and their share of federally collected revenue in 2020. Cumulatively, all 36 states saw a 3.43% decline in their IGR from N1.26 trillion in 2019 to N1.21 trillion in the year 2020 under review.
“In total, 18 states saw a decline in their year-on-year IGR while 18 other states could weather the fiscal storm induced by the pandemic, growing their revenue — in some cases by as high as 87.02%.
“Worthy of note is Lagos state, which despite being the epicentre of the pandemic, saw a 5.08% growth in its IGR, a testament to the resilience of its fiscal strategy.
“Rivers state once again topped the overall 2021 Fiscal Performance Ranking despite COVID-19 induced fiscal shocks to its IGR, indicating that the fiscal fundamentals of this state, compared to others in the country, are more prudently managed.
Two states made it, as new entrants to the Top 5 category in the overall 2021 ranking – Ebonyi state emerged in 2nd position; up from 6th position in 2020 ranking, and Kebbi state emerged in 5th position, up from 11th position in 2020.
“In the 2021 Performance Ranking, two states dropped out of the Top 5 in overall ranking; Ogun state (now 19th) and Kano state (now 22nd), due to a sharp decline in their IGR in 2020.
On States comparative viability, BudgIT stated: “Only three states in the country can meet their operating expenses obligations with a combination of their IGR and Value Added Tax (VAT), these states are Lagos, Rivers, and Anambra.
“In contrast, states at the bottom of the ranking need to do more to rapidly consolidate on any ongoing strategies to improve their IGR and by extension, their viability as federating entities. This is necessary considering the comparative size of their operating expenses and the global push to transition away from fossil fuels like crude oil, a key source of federally distributed revenue.
“These states at the bottom ranking include Jigawa, Delta, Benue, Taraba and Bayelsa.”