How South-West, North-West raised half year’s IGR to N849bn

Significant growth in the internally generated revenue (IGR) of states in the North West and South-West geopolitical zones lifted the cumulative IGR of the 36 states and the Federal Capital Territory (FCT) by 38.5 percent in the first six months of 2021. The total IGR at half-year 2021, rose to N849.12 billion up from N612.87 billion at half-year 2020, meaning that within the first six months of 2021, IGR increased by an additional N236.25 billion over what the sub-national governments and FCT realised in the heat of the pandemic in 2020. This represents N39.4 billion extra income on a monthly basis.

Jigawa, Ogun and Ekiti states grew their IGR by three digits while strong outings from Niger and FCT put those five states as the best performing states at half-year 2021. Jigawa grew its IGR by 210.3 percent from N3 billion last June to N9.33 billion as of June this year.

Strategies put in place by the current administration in Ogun State have started to yield positive results because, at half-year, its IGR rose by 131.5 percent to N54.8 billion as against N23.68 billion at half-year 2020.
Another state with strong outing is Niger, which posted 97.3 percent growth, ahead of 96.2 percent growth in FCT’s half-year IGR. Niger’s IGR rose to N7.93 billion in June 2021 as against N4.02 billion realised in June 2020.

Growth in Cross River’s IGR was 83.3 percent; 82.9 percent in Sokoto; 82.4 percent in Borno; 81.6 percent in Kaduna; 70.7 percent in Kwara, and 67.2 percent in Kebbi.
Yobe is the only state that recorded a single-digit growth of 2.7 percent, which translated to N4.03 billion at half-year 2021, compared with N3.92 billion as of June 2020.

However, two states have negative growth in their IGR. The IGR of Rivers State declined by 11.2 percent to N57.32 billion in June 2021 down from N64.59 billion as of June 2020. Kano’s IGR fell by 14 percent at half-year 2021 to N15.05 billion in contrast to N17.51 billion in June 2020.

Growth most pronounced in MDAs, direct and other taxes
Revenues from ministries, departments and agencies of states recorded a significant growth at half-year 2021. While N84.11 billion was the IGR made by states’ MDAs in June 2020, a 106.35 percent growth in their performance ensured states earned N173.56 billion as half-year MDAs’ IGR.

Other taxes grew by 74.04 percent from N81.95 billion in June 2020 to N142.64 billion as of June 2021. Direct assessment tax rose by 71.3 percent from N16.39 billion last year June to N28.07 billion as of June 2021. PAYE grew by 16.7 percent while road taxes increased by 37.2 percent.

States’ IGR structure is changing
The major components of the IGR of states are PAYE, direct assessment, road taxes, other taxes and MDAs’ revenue. The analysis of their structures showed a gradual shift at half-year 2021. With N418.22 billion, PAYE accounted for 68 percent of the IGR of the 36 sub-national governments and FCT in June 2020. And as PAYE rose by 16.7 percent to N488.11 billion in June 2021, it only accounted for 57 percent of the total IGR at the half-year 2021.

Direct assessment and road taxes accounted for just 3 percent and 2 percent respectively of the total IGR, but other taxes gained more weight in the structure of the IGR components. The weight of other taxes increased to 17 percent as of June 2021 compared with 13 percent in June 2020.

Read also: 36 States, FCT record N849bn revenue in 1H 2021

All the tax components-PAYE, direct assessment, road taxes, and other taxes accumulated to N675.57 billion at half-year 2021, representing a 27.8 percent increase over N528.76 billion realised in June 2020. Notwithstanding, the weight of the tax components reduced to 80 percent in June 2021 against 86 percent as of June 2020. The weight of MDAs’ revenues rose to 20 percent in June 2021 compared with 14 percent as of June 2020.

Source: NBS, BRIU

Almost half of IGR generated in South West
By accounting for N385.4 billion of the IGR, the southwest states comprising Lagos, Ogun, Oyo, Osun, Ondo and Ekiti accounted for 45.4 percent of the total IGR generated by the 36 states and FCT at half-year 2021. Lagos, Nigeria’s commercial capital accounted for the bulk of the region’s IGR, notwithstanding, states like Ogun, Oyo and Ekiti witnessed a marginal increase in their contributions to regional and national IGR. Ogun State accounted for 3.9 percent of the half-year IGR of 2020 whereas, in 2021, its contribution rose to 6.5 percent.

Oyo State’s contribution moved from 2.9 percent in June 2020 to 3 percent in June 2021 while Ekiti moved from 0.5 percent in June 2020 to 0.8 percent in June 2021.
The South-South geopolitical zone came second in terms of contribution to the total IGR. With a combined IGR of N156.17 billion at half-year 2021, the region accounted for 18.4 percent of the total IGR generated in Nigeria during the reference period.

The decline in South-South’s IGR came mainly from Rivers State, which in June 2020 accounted for 10.5 percent of the total IGR compared with 6.8 percent in June 2021. The contribution of AkwaIbom’s IGR fell to 2.1 percent this year’s June compared with 2.6 percent in June 2020. Delta State’s IGR accounted for 5 percent in June 2020 as against 4.9 percent in June this year.
The next region in terms of relevance is the north-central region, owing to the contribution of Abuja, Nigeria’s administrative capital. Abuja’s contribution to the total IGR rose to 8.1 percent as of June 2021 compared with 5.7 percent in June 2020.

The contribution of Kwara State to total IGR moved up to 1.9 percent as of June 2021 from 1.5 percent as at half-year 2020. Niger State’s contribution rose to 0.9 percent at half-year 2021 up from 0.7 percent as of June 2020.
North West accounted for 9.3 percent of the IGR at half-year; South East, 6.15 percent while the North East accounted for 5.05 percent.

IGR of states that are a hotbed of insurgency and banditry
Zamfara, Katsina, Borno, Kaduna and Niger states have witnessed a number of attacks by insurgents and bandits in the last few months. Regardless, the IGR of Zamfara State increased by 18.6 percent to N8.4 billion in June 2021 compared with N7.09 billion in the same period last year. Katsina’s IGR increased by 35.3 percent to N7.49 billion in June 2021 in contrast to N5.54 billion in the same period last year. Borno’s IGR rose by 82.4 percent to N9.81 billion in June 2021 compared with N5.38 billion in the same period in 2020.

Kaduna State’s IGR increased to N26.4 billion in June 2021 as against N14.55 billion in June 2020, representing an increase of 81.6 percent. Also, Niger State witnessed a 97.3 percent increase in its IGR to N7.93 billion in June 2021 compared with N4.02 billion in June 2020.

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