Only six states in the federation are said to be economically viable, according to the 2019 Annual States Viability Index, ASVI, released on Sunday by Economic Confidential.
The states include Lagos, Ogun, Rivers, Kwara, Kaduna and Enugu, while also listing the poor and insolvent states to include Katsina, Kebbi, Borno, Bayelsa and Taraba states, based on their poor internally-generated revenue, IGR, which is far below 10% of their receipts from the federation account.
The index 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 IGR are generated by states through Pay-As-You-Earn Tax, PAYE, Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies, MDAs.
The IGR of the 36 states of the federation totalled N1.3 trillion in 2019, as compared to N1.1 trillion in 2018, an increase of about N200 billion. Of the states that are not economically viable, Katsina, the home state of President Muhammadu Buhari, generated the poorest and lowest IGR compared to its federal allocation in 2019.
The report on economically viable states by the Economic Confidential, an intelligence magazine, further indicates that the IGR of Lagos State of N398 billion is higher than that of 20 other states put together, whose IGRs are extremely low, and poor compared to their allocations from the Federation Account.
Meanwhile, the Federal Capital Territory, which is not a state but the nation’s capital, generated N74 billion IGR against N30 billion from the Federation Account in the same period. Lagos State remained in its number one position in IGR with a total revenue generation of N398 billion compared to FAAC of N270 billion, which translates to 147% in the 12 months of 2019.
It is followed by Ogun, which generated IGR of N70.92 billion compared to FAA of N92 billion representing 77%; Rivers with N140 billion compared to FAA of N219 billion, representing 64% and Kwara with a low receipt from the Federation Account, has maintained its impressive IGR by generating N30 billion compared to FAA of N80 billion (38%).
Others with impressive IGR include Kaduna, N44 billion compared to FAA of N129 billion (35%); Enugu, N31 billion compared to FAA of N103 billion (29%); Ondo, N30 billion compared to FAA of N103 billion (29%); Edo, N29 billion compared to FAA of N108 billion (27%); Anambra, N26 billion compared to FAA of N98 billion (27%), while Cross River earned N22 billion IGR against FAA of N99 billion representing 25%.
Still, on economically viable states, the 10 states with impressive IGR generated N894 billion in total, while the remaining 26 states merely generated a total of N440 billion in 2019. Katsina, the home state of President Muhammadu Buhari, generated the poorest and lowest IGR compared to its federal allocation in 2019.
It realised a meagre N8 billion compared to a total of N136 billion ‘free money’ received from the Federation Account Allocation, FAA, in 2019, representing 6%. It is followed by Kebbi, N7.3 billion compared to FAA of N100 billion (7%); Borno N8 billion compared to FAA of N121 billion (7%) and Taraba, N6.5 billion compared to N86 billion of FAA (8%).
Others include Bayelsa, the home state of former President Goodluck Jonathan, with IGR of N16 billion compared to N176 billion of FAA, representing 9%; and others.
