The Annual States Viability Index (ASVI) 2022 report has shown that the states of Bayelsa, Kebbi, Katsina, Akwa Ibom, Taraba and Yobe cannot survive with allocation from the Federal Account Allocations Committee (FAAC).
The report which was released by Economic Confidential on Monday in Abuja showed that these six states are insolvent as their Internally Generated Revenues (IGR) in 2022 were below 10% of their receipts from the Federation Account Allocations (FAAC).
“The index carefully and painstakingly computed proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable, and cannot survive without the federally collected revenue, mostly from the oil sector.
“The IGRs are generated by states through Pay-As-You-Earn tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDAs).
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“The IGR of the 36 states of the federation totaled N1.8 trillion in 2022 was above that of 2021 which was N1.76tr. The report by the Economic Confidential, an intelligence magazine further indicates that the IGR of Lagos State of N651bn is higher than that of 30 other States put together whose Internally Generated Revenues are extremely low, and poor compared to their allocations from the Federation Account.
Lagos remained steadfast in its number one position in IGR among the states with a total revenue generation of N651bn compared to FAA of N370bn which translate to 176% in the twelve months of 2022. Ogun State which generated IGR of N120bn compared to its FAA of N113bn representing 106%, followed by Rivers with generated N172bn IGR compared to FAA of N363bn representing 48%; Kaduna State with N58bn compared to FAA of N155bn representing 37%; Kwara with IGR of N35bn compared to FAA of N99bn representing 36% and Oyo generated N62bn compared to FAACof N181bn representing 34% and Edo generated N47bn IGR compared to N147bn FAA representing 32%.,” the report said.
It added that the total internally generated revenues of N1.15tr from the seven most viable states in 2022 was almost twice the total IGR of 29 remaining states put together that merely generated about N650bn.
Others with impressive IGR include Anambra with IGR of N33bn compared to FAAC of N127bn representing 27%; Enugu with IGR of N28bn compared to allocation of N111bn representing 26%; Ondo with IGR of N32bn compared to allocation of N135bn representing 24% while Nasarawa State earned N19bn IGR against allocation of N92bn representing 21%.
In the same vein, the six states that may not survive without the Federation Account due to their extremely poor internal revenue generation of less than 10% compared to their federal allocations.
The Economic Confidential ASVI further showed that only three states in the entire northern region have IGR above 20% in comparison to their respective allocations from the Federation Account. They are Kaduna, Kwara and Nasarawa states in that order.
“The oil-producing Bayelsa and Akwa Ibom are the only states in the South with the poorest Internally Generated Revenue of less than 10% compared to their FAA in 2022.
“The other poorest IGR states are Katsina and Kebbi in North West; Yobe and Taraba in the North East,” it added.
The report recommended that the IGR of the respective states can be improved through aggressive diversification of the economy to productive sectors rather than relying on the monthly Federation Account revenues that largely come from the oil sector.
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