Lagos leads in Internal Revenue Generation (IGR)
Lagos state takes the lead in internal revenue generation (IGR), contributing 34% of the total revenue, according to recent data from the National Bureau of Statistics. However, despite its impressive contribution, the state saw a 14% decrease in revenue in 2022 compared to the previous year.
Analyzing the State Revenue Dynamics
Business analyst Chika Mbonu underscores the significance of the IGR to the overall revenue of each state, drawing attention to the disparity between the IGR and the federal allocation. Delta State, for example, only generated 19% of its total revenue from IGR, while the rest was derived from the Federal Allocation Account Committee (FAAC).
Challenges in Revenue Generation
Mbonu highlights the challenges faced by states in revenue generation, pointing to excessive taxation and the adverse impact on small businesses. He emphasizes the need for tax reforms at the state and local government levels to reduce the burden on businesses and foster economic growth.
Role of Governance in Development
Drawing attention to the correlation between effective governance and state development, Mbonu emphasizes the importance of governors’ commitment to public service. He stresses the need for a comprehensive development agenda at the state level that prioritizes infrastructure, healthcare, and education to improve citizens’ quality of life.
Fostering Effective Implementation of Policies
Mbonu underscores the crucial role of implementation in the success of policy initiatives. He urges state governments to ensure the effective implementation of tax reforms and developmental projects, emphasizing the need for transparency and accountability in revenue management.
Building a Sustainable Future
In conclusion, Mbonu advocates for a sustainable approach to governance that fosters economic growth and social development. He emphasizes that the true measure of a state’s prosperity lies not just in its financial figures but in the tangible improvements in the lives of its citizens. He calls for a collective effort to create an enabling environment for businesses and ensure the welfare of all Nigerians.
Transcript:
(00:00) The 36 Federation States and the federal capital 33 reported 1.92 trillion in internally generated revenue or IGR in 2022 and that’s according to the National Bureau of Statistics the IGR reported Monday states that last year’s amount represents a modest growth of just 2% year on year compared to 1. 89 trillion reported for IGR in 2021
(00:25) according to analysis Lagos state had the greatest internally generated Revenue last year with 6 51.1 15 billion naira or 34% of the headline total Lagos state revenue fell by 14% last year compared to 7.5346 billion naira it generated in 2021 now live here in the studio with me is arise business analyst Chika Mbonu for this analysis of this good morning it’s good to have you morning there’s a whole lot of money on the table the the money is is is is there money in the prize winner. Don’t Run Away a whole
(01:01) lot of money don’t run away I’m not asking for for anything acknowledge the accolades okay oh I thought oh my own IGR yeah but that was something for for for everyone it’s for what the whole team puts together it’s for Arise news I just represent the organization we always winning the prizes yeah we always win I I I I’ve seen the let’s talk about the weave of money I’ve seen the reports that are pushed out first of all the committee on tax taxation um interesting as committee waiting for them to implement and um I’m going to tie it
(01:40) into the second run second issue in your rundown yes where he talk about the IGR now and and um of course the story in the IGR push it out there um because the first thing is Lego state is about 34% of the national total the other statistic that there is that the the Lagos also uh IGR is more than the 25 States put together put together out of 36 out of 36 States you know in the in the north-central northwest south-east and North-east if you add up the IGR said IGR more than winner a winner but I mean what we have tried to do um here
(02:19) again for our viewers so they can see putting in perspective if we going ahead to put Calculate or tabulate the FAAC location per state Vise-a-Vise so so what we mean what our viewers are looking at right now the screen is that the second column which is the F for example you look at Delta State the FAAC allocation was 348 billion but the state at the last mhm column generated 19.77
(02:54) is that yes yes so 434 yeah so you find the percentage is 19.7 yeah no Delta State for example FAAC allocation is 348 billion 85.9 billion total revenue in the state which is IGR inflow to plus the FAAC allocation is 434 billion now what we want to do is to look at the state effort in Revenue generation and we said what represent the of IGR to the total inflow into the state revenue in the state and for data set for example you will see that IGR the total revenue of the sale is about just 19%. Out of the total inflow 434 total revenue total IGR over over the state Revenue
(03:40) Akwa Ibom total IGR over the state revenue is 11.16 so for every 100 naira that they state spent they got 90 naira literally from Abuja well well put and then went ahead look at it there are some state let me put it that way data Delta state for every they spend they got about 19 naira from from 19 naira just from IGR the State in the state the other one came from Abuja. Adamawa 18 naira from the state you know the balance from Abuja. Eboyi, Taraba, Kastina, Yobe even let put Bayelsa for every 100 naira they spent they only got about six naira internally internally so 94 naira came from Abuja came from Abuja um Akwa Ibom they for every 100 naira they spent 90 naira
(04:37) spent sort of came from Abuja what’s name Kebbi 82 naira came 88 naira came from Abuja and you can you can go on and go on and see and see that this tells you a big story there why do the states exist now tie this to the story that came out last week we had 28 States the latest latest um foreign direct investment report no 28 states have a single naira investment over over the per over the period so what we see is States every month go to Abuja collect their FAAC location and just be sharing how how do we get how do we get states to generate revenue is the poster
(05:22) boy but how do can we get more states to generate there’s a report by budget the budget yes it’s called the state of the state of the States state of the states the condition of the States you know and every state of Nigeria had something to sell had one mineral or agriculture or something to sell but what are the governors doing I thought about this the problem we have really is not Abuja Aso Rock is a subnational government what is happening at the state levels local and local government levels and again tiing
(05:55) to this tax issue the tax reform tax reform is not a problem with the Fed government where the problem really is States and local government the states and the local governments regularly you will hear some states go and shut down cor companies because they’re looking for trying to force Revenue out of them there’s a story that in Alaba some people who sell pure water they get about 12 tickets in a day 12 different taxes those are h h h yeah different taxes you know and so unofficial unofficial and so a lot of times some of
(06:30) these are Revenue collectors actually private contractors to some official and Bas yeah not based on political patronage let’s put it out there FCT Abuja the small small businesses they have complained bitterly I mean every day there’s one Levy or the other Levy and other ly look at this there about 200 informal foral and informal taxes in Nigeria and they want to bring it down to 10 some folks said that the issue of tax in Nigeria is not about the the the the federal official tax is about the unofficial tax The Unofficial but
(07:04) unofficial at what level is the levels of the state and local government and a lot of them happening also in FCT a lot of the small businesses they have reached out to me complain bitterly they have been shut down that been locked every time one tax or the other in this country that everybody is suffering so the committee’s work is c for it and I’m wishing them good luck and and you and the rest have done their job now it has to implementation that’s why want you to weigh it how do we implement this
(07:32) remember what the guy said the comp chairman said he said when he finish with feder now he’s going to go to the state state houses of assembly to go and speak to them a lot of these things also involve you know changes in Constitution changes in the corporate tax laws now and so on and so forth implementation is the issue because each time we talk about this the next day you find all these people the money is Switched for them for them they just go out there and just be harassing businesses and people who are struggling they sell in one week
(08:01) and you’re shutting them down and you know carrying their goods and so I mean it’s just Reckless sometimes and and wicked what some people do you know so I wish the community good luck but you see the other thing now is look at this it reflect in look at the states some states for every 100 naira they spend 90 naira of it come from Abuja every month they just go there Governor commissioner for finance they just go and share money the only one that about comes from Lagos State and the message there also is when the money is
(08:36) coming into Lagos State now nobody knows whether you are from south or north or east or west it’s decentralized you know everybody every citizen you know does something you know so when it comes to politics also let everybody also know that Lagos is also do we need a development agenda for States and local governments that they can buy in and at least raise up their game EST state is as good as it governor a state is as good as a governor is the governor is willing to do good and and serve the people it’s so easy do good by
(09:07) building airports and come on man I’m trying to ask you I SP about that yesterday I mean the airports are like make on d for most of them to you know suck away money because you know the are grandos no idea one flight maybe in a week for the governor whenever he goes to Abuja to go and Sh a location and not no Revenue coming in to the state I I keep telling you look at the issue of dividend of democracy if you go to the guys who live in alang Marina or rout to Lagos now and say you know government working remember
(09:48) the guys who used to spend hours on traffic yeah and spend a lot of money on traffic you know and come to the Marina for their businesses every day Island now they can enter the Blue Line yes now they can tell you what democracy lagos is working yes if you go to ABIA State now there’s a road called um road we have been talking about that road for a long time that road have been abandoned by by um oo T was the last governor of viia state um um I can’t remember his name count all the rules abandoned but now you
(10:29) remember when the governor brought Jer there the whole people were like Hing J for finally governance is simple at the grassroot level if you want to do well that’s okay provide our people with hair centers thank you water water to drink good roads the basics the basics thank thank you so much it’s it’s good having you here um thank you now now we know sometimes when you’re in Abuja it’s for you to get a boot on the ground and give us some nice stories good morning have let’s have this thank you so much for that.
