The Annual States Viability Index (ASVI), released yesterday by Economic Confidential showed that only six states in the federation are economically viable.
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. The report 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 FAA of N270 billion which translate to 147% in the 12 months of 2019. It is followed by Ogun which generated IGR of N70.92 billion compared to FAA of N92bn 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 representing 38%. (Vanguard)