The 36 states and the Federal Capital Territory generated a sum of N1.31 trillion as Internally generated revenue (IGR) in 2020. This was contained in the state IGR report, which was recently released by the National Bureau of Statistics (NBS).
According to the report, the states’ IGR declined by 1.93% from N1.33 trillion, recorded in the previous year to N1.31 trillion in 2020. It however increased by 11.7% compared to N1.69 trillion recorded in 2018.
The decline may be due to the effects of the covid-19 pandemic on the various states of the federation, as they were forced to implement lockdown protocols to curb the spread of the disease in the country.
- States generated N1.09 trillion from taxes in the year 2020, accounting for 83.3% of the total IGR received in the year.
- Tax revenue also declined, when compared to N1.11 trillion collected in the previous year. This represents a 2.25% decline year-on-year.
- Lagos State recorded the highest Internally Generated Revenue of N418.99 billion, accounting for 32.1% of the total and closely followed by Rivers State with N117.19 billion.
- Others with the highest IGR in 2020 include Abuja (N92.06 billion), Delta (N59.73 billion), and Kaduna (N50.75 billion).
- Kebbi State recorded the highest year-on-year growth of 87.02%, closely followed by Ebonyi at 87.3%. Oyo State grew its IGR by 42.23%, Borno (41.63%), while Katsina grew by 34.16%.
- On the flip side, Benue State recorded the highest year-on-year decline of 41.38%, followed by Sokoto State, which dipped by 37.93%, Kwara (36.03%), Jigawa (32.95%), and Ogun State (N28.44%).
A cursory look at the data shows that the States recorded the highest quarterly IGR in the first quarter of the year, before the covid-induced lockdown in March 2020. It however dipped significantly by 25.53% to stand at N269.88 billion in Q2 2020.
States generated a sum of N338.57 billion in Q3 2020 and then recorded a marginal decline in Q4 2020 to stand at N335.25 billion.
Lagos dwarfed others
Lagos State recorded the highest internally generated revenue in 2020, having made N418.99 billion, accounting for 32.08% of the total states’ IGR recorded in the period under review.
- It is no surprise that Lagos State makes this much revenue as it is regarded as the commercial hub of Nigeria.
- According to the data from NBS, Rivers State is a distant second on the list with N117.19 billion as IGR, representing 8.97% of the total, while the Federal Capital Territory, Abuja followed closely with N92.06 billion, representing 7.05% of the total recorded in the year.
- Others on the list include Delta State (N59.73 billion), Kaduna State (N50.77 billion), Ogun (N50.75 billion), and Oyo State with N38.04 billion.
Kebbi, Ebonyi boosted revenue by over 80%
Kebbi State and Ebonyi State grew their internally generated revenue by over 80%, with Kebbi recording 87.02% growth in IGR to stand top on the list of states with the highest growth rate; followed closely by Ebonyi State with 82.3% growth in IGR to stand at N13.59 billion.
- Oyo State grew its IGR by 42.23%, Borno (41.63%), Katsina (34.16%), and Gombe (25.5%).
- Meanwhile, 18 out of the 37 states of the federation recorded a decline in IGR in 2020, a list led by Benue State, having dipped its annual IGR by 41.38%, followed by Sokoto with 37.93%, Kwara (36.03%), Jigawa (32.95%), and Ogun State with a decline of 25.44%.
What this means
- The decline in states’ internal revenue was caused by the pandemic which struck earlier in 2020, disrupting economic activities in the country.
- Nigeria recorded a recession in the third quarter of 2020, after a consecutive economic contraction, recorded in Q2 and Q3 2020.
- It, however, recovered from the recession in the fourth quarter. It is therefore hoped that as economic activities resume fully in the country, the states will be able to boost their revenue in the short-to-medium term.