Data released by the National Bureau of Statistics (NBS) on Monday indicated a modest growth in the Internally Generated Revenue (IGR) of Nigerian states, reaching N1.93 trillion in 2022.
Despite this positive trend, the increase stood at a mere 1.57 per cent compared to the N1.89 trillion recorded in 2021.
Among the top performers in revenue generation were Lagos, leading the pack with N651.15 billion, closely followed by Rivers at N172.82 billion, and the Federal Capital Territory (FCT) at N124.37 billion. Ogun and Delta states also held strong positions, contributing N120.58 billion and N85.90 billion respectively.
On the other end of the spectrum, Kebbi, Taraba, Yobe, Ebonyi, and Katsina were the states with the lowest IGR figures, recording N9.15 billion, N10.24 billion, N10.46 billion, N12.43 billion, and N13.06 billion, respectively.
The NBS highlighted that the IGR data for 2022 was derived from two primary revenue sources: taxes and revenue generated by Ministries, Departments, and Agencies (MDAs). The tax sub-category encompassed a diverse array of revenue streams, such as Pay As You Earn (PAYE), direct assessment, road taxes, stamp duties, capital gains tax, withholding taxes, other taxes, and local government revenues. This diverse tax base indicates the multifaceted nature of revenue generation within the various states.
Despite the incremental increase, further analysis is needed to understand the specific factors driving the disparities in revenue generation across states and to explore the potential for enhanced strategies to bolster economic growth and development at the sub-national level.
It said,
“PAYE was the most contributing revenue source during the year, recorded 67.62 per cent share to the total tax generated revenues nationwide. While capital gains tax was the least in the year under review with 0.24 per cent share to total tax revenue.
“Oyo, Lagos, and Jigawa states were the three leading states with the highest LGA revenue reported during the year. The states recorded N11.83bn, N11.51bn, and N8.70bn respectively.”
The cumulative amount collected through Pay As You Earn (PAYE) in 2022 reached N994.41 billion, while direct assessment tax contributed N52.35 billion, road taxes amounted to N24.57 billion, stamp duties accounted for N27.13 billion, capital gain tax totaled N3.52 billion, withholding tax summed up to N139.91 billion, other taxes combined to yield N179.95 billion, Local Government Area (LGA) revenue totaled N48.71 billion, and states derived N455.07 billion from their Ministries, Departments, and Agencies (MDAs).
Despite the upward trajectory in Internally Generated Revenue (IGR), states continued to heavily depend on Federal Government allocations, as seen in previous years. The total Federal Accounts Allocation Committee (FAAC) allocation to states, excluding the Federal Capital Territory, stood at N3.16 trillion, marking a 63.73 per cent increase compared to the collective IGR of the states for the year. Additionally, states resorted to domestic borrowing, amounting to N870 billion, in 2022 to supplement their expenditures.
In 2022, only 11 states, alongside the Federal Capital Territory, succeeded in attracting foreign investors, while the remaining states missed out on potential investment opportunities.
