State governments under the auspices of the Nigeria Governors’ Forum (NGF) and the Federal Ministry of Finance are understudying Lagos State’s internally generated revenue (IGR) template and exchanging ideas on how to strengthen their finances.
The action is predicated on the continuing drop in the distributable revenue from the federation account to their three tiers of government- federal, state and local governments, which is making it a lot tougher for the government to meet their obligations to the people.
With an average of N34 billion monthly IGR, Lagos, which is Nigeria’s economic capital, is by far more financially stable than the other 35 states. The state also depends 70 percent on IGR to fund its annual budgets compared to other states which rely majorly on allocation from the federation account.
Representatives of governors from the six geo-political zones, drawn from Gombe, Nasarawa, Delta, Ebonyi, Sokoto and Ekiti States were in Lagos recently to interface with the officials of Lagos.
Leader of the 30-man NGF delegation, Olanrewaju Ajogbasile noted that the visit, which was funded by the World Bank and the Federal Ministry of Finance was aimed at exchanging ideas and learn how the Lagos State government drive its economy and the strategies it uses to grow its IGR despite the economic meltdown occasioned by the COVID-19 pandemic and the destructive EndSARS protest.
“We are here in Lagos to learn from the innovative strategies of the Lagos State government, adopt and follow the Lagos State template in revenue generation, the template which is the best in the country today,” he stated.
While commending the state government for adopting technology in its revenue drive, Ajogbasile noted that the Lagos IGR technique should be a standard template for achieving sustainable economic growth for the country.
He said it was highly inspiring to note that Lagos still grossed a total of N418.99 billion, which accounted for 32.1 percent of the total N1.33 trillion IGR recorded by the 36 states in Y2020 in spite of various challenges faced by the state last year.
Welcoming the NGF team to Lagos, the state commissioner for finance, Rabiu Olowo, stated that the state government has introduced a lot of innovations to drive its cashless revenue collection policy drive.
According to him, the state financial system has been fully automated, giving no room to cash transactions in any government financial deal.
Olowo, represented by the permanent secretary in the ministry, Yemi Ayoola, explained that the state has also standardised its revenue collection system through the introduction of different modes such as point of purchase system (POS), single treasury account (TSA) different banks’ payment opportunities, and application of standard sharing formula between the state and local governments to eliminate multiple taxation (in respect of revenue from Land Use Charge)
The commissioner explained that the huge success achieved by the state’s Land Use Charge (LUC) was driven by technology.
“Technology has helped us a lot, every transaction is done through the electronic tax system. We have blocked possible leakages with the introduction of revenue codes as all revenues are traceable due to a single treasury account,” he explained.
