Seven states are unable to repay debts owing to poor mechanisms for generating internal revenue, according to a new report.
The Annual States Viability Index (ASVI) shows many states cannot survive without the monthly disbursement from the Federation Acccount.
“The index showed that seven States are insolvent due to very poor IGR that were far below 10% of their receipts from the Federation Account,” said Yushau Shuaib, editor- in- chief of the Economic Confidential.
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He presented the reported to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engr Elias Mbam last Friday.
The ASVI report assessed and ranked States by their annual IGR in comparison with their receipts from the Federation Account Allocation .
Apart from Lagos and Ogun, which ranked very high in 2019, five more states have impressive IGR in 2019 compared to 2018.
States with impressive IGR are Rivers, Kaduna, Enugu, Kwara and Zamfara States as they improved by over 10 percent.
With this over-dependence in the monthly Federation Account Allocation, the RMAFC Chairman, Elias Mbam, called for concerted efforts by state governments in boosting their internally generated revenue.
He said the FAA is overstressed by the over-dependence of the tiers of government.
“I have come to realize that Economic Confidential has become a household name and its reports that are factual and authoritative should be useful, especially in guiding states whose revenues keep dwindling so that they can improve.”
RMAFC Secretary, Mohammed Shehu, said reports on economic indices should be done to help governments improve in their fiscal efficiency.
He said the Commission would look at the report further for recommendation to the Federation Account Allocation Committee (FAAC).
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