Lagos, Rivers, and Anambra are three out of thirty six states of the Federation that can meet their operating expense obligations with a combination of their internally generated revenue and value added tax, BudgIT report reveals.
As contained in the 2021 ‘State of States’ report released on Tuesday, only Lagos, Rivers, and Anambra states appeared at the top of the ‘Index A’ ranking which looks at the ability of states to meet their operating expenses obligations with only the sum of their internally generated revenue and VAT received.
While states at the bottom of the index ranking include Jigawa, Delta, Benue, Taraba and Bayelsa respectively.
The report showed that all 36 states saw a 3.43 per cent decline in their 2020 IGRs (N1.21tn) from (N1.26tn) in 2019.
It said that 18 states saw a decline in their year-on-year revenues, while the remaining 18 states grew their revenues in some cases by as high as 87.02 per cent.
Read also: Nigerian economy and real estate sector
On subnational debt outlook, the report shows that total debt burden of the 36 states increased from N5.39tn in 2019 to N5.86tn in 2020, with Lagos, Kaduna, Edo, Cross River and Bauchi topping the list of states with highest debt burden.
The increase in debt burden according to the report, was driven largely by exchange rate volatility which saw the value of the naira jump from N305.9/$1 in 2019 to N380/$1 as at December 31st 2020.
According to BudgIT, only seven states in Nigeria have functioning Treasury Single Accounts, and about 24 states and 27 states respectively have introduced ‘biometric use in payroll management’ and ‘bank verification number use in payroll management’.
“Based on each state’s 2020 revenue, five states prioritized investment in infrastructure by spending more on capital expenditure than operating expenses.
“The states are Ebonyi, Rivers, Anambra and Cross River states in the south and Kaduna state in the north.
“Furthermore, only 16 states published details of their contracts online for public scrutiny, while 20 states were yet to do so at the time of the assessment.
The report shows the need for all states to work hard to build economic prosperity considering the global push to transition away from fossil fuels like crude oil which a key source of federally distributed revenue.
