IGR: Lagos Leads Other States With N651.1bn, Rivers N172.8bn  

*FCT Generates N124,366,774,519.25 Lagos states led other states of the federation in the amount of internally generated revenue in 2022, according to the IGR report released by the National Bureau of Statistics (NBS) on Monday. According to the National Bureau of Statistics, Lagos, Rivers, and the Federal Capital Territory (FCT) stood out as the leading states in terms of IGR, ranking in  impressive amounts of N651,145,633,085.30, N172,823,232,535.44, and N124,366,774,519.25, respectively. On the other end of the spectrum, Kebbi, Taraba, and Yobe were the least successful in generating revenue, managing to collect only N9,146,249,907.83, N10,238,110,125.95, and N10,456,776,796.18, respectively. Collectively, the 36 states of Nigeria and the Federal Capital Territory (FCT) managed to generate a total of N1,925,612,626,650.76 as IGR in 2022. This represented a modest growth of 1.57 per cent when compared to the N1,895,786,762,263.80 generated in the previous year, 2021. The report further stated that the revenue for 2022 came from taxes, including various types, and the income generated by different government departments and agencies. The total revenue collected across all states and the FCT increased slightly compared to the previous year. According to the report, the main source of revenue for the year was the pay-as-you-earn (PAYE) tax, contributing a significant 67.62 per cent to the total tax revenues generated across the country. The report also stated that capital gains tax, on the other hand, played a much smaller role, accounting for only 0.24 per cent of the total tax revenue. In terms of local government area (LGA) revenue, Oyo, Lagos, and Jigawa emerged as the top three states. They reported impressive figures of N11,832,437,020.33, N11,505,586,283.35, and N8,700,993,591.78, respectively. The NBS report also noted that in the year 2022, the Internally Generated Revenue (IGR) was primarily driven by two major sources: taxes and revenue from Ministries, Departments, and Agencies (MDAs).

Only 25 States Have Passed The Fiscal Responsibility Law – NGF 

The Nigeria Governors’ Forum (NGF) has disclosed that less than 25 states in the country have passed the Fiscal Responsibility Law. It also said that 30 state have passed the Debt Management law. The Director-General, NGF, Mr Asishana Okauru, said this while delivering a goodwill message at the Fiscal Responsibility Commission’s (FRCs) Stakeholders Dialogue on Implementation of Section 45 of the Fiscal Responsibility Act (FRA) in Lagos. Okauru, represented by Mr Olanrewaju Ajogbasile, Senior Programme Manager, NGF, said that states were also domesticating core principles of the FRA, regarding fiscal planning and management. He revealed that 15 states recorded an average monthly debt service that was less than 40 per cent of gross Federation Account Allocation Committee (FAAC) for 2021 financial year and total debt stock at the end of December 2021. According to him, although section 45 of the FRA is the premise of the deliberation, all sections of the Act or state’s FRL’s, are reinforcing of each other in terms of delivering fiscal sustainability across the tiers of government. “Unfortunately, certain flexibilities and a weak consequence system, renders full compliance a choice. “Likewise, fiscal planning has largely remained unrealistic due to paucity of requisite data, low Own Source Revenue (OSR), increase in permanent and development expenditures. “As well as the susceptibility to volatiles in FAAC, crude oil, inflation rate and exchange rate parameters, among others,” he said. According to him, the NGF Secretariat will continue to advocate as good practice the tenets and provision of the Act through its engagements, initiatives and discourse around fiscal transparency, accountability and sustainability. In a keynote address, the Secretary to the Government of the Federation (SGF), Dr George Akume, said that the dialogue was organised to promote the need for subnational to borrow through the right channels and for the right reasons. Akume, represented by Dr David Eze, Assistant Director, Finance and Account, OSGF, stated that the commission must adhere to laid down rules that ensure that government officials at all levels do not abuse the process of borrowing. He noted that governments across the world grow faster and better through very good and strong institutions, rules and regulations, hence the implementation of the FRA 2007 is worthwhile. The SGF stated that there was the need to urgently address some of the excesses and infractions of the FRA 2007, particularly with the banks. Akume also demanded for adequate machineries to effectively control and properly manage public resources, as public debt lowers the future generation’s well-being. He expressed worry that the private sector may be discouraged from investing in the states, if the government needs to service debt and also provide a satisfactory environment for investment in infrastructure. “Although, it is believed that the efficiency and equity benefit of borrowing by subnational government outweighs associated macroeconomic risk, factors such as lack of institutional capacity. “Also, quest to control subnational government impulse in running excessive deficit and the need to take their fiscal excesses in the area of borrowing cannot be overemphasised,” he said. According to him, systemic subnational insolvency may impede the growth of the capital market, deter fiscal space for infrastructure investment, threaten financial stability and core public services. Akume said that might create pressure on the Federal Government to provide financial assistance to ensure a continued provision of essential public services. The SGF insisted that a disciplined borrowing processes was needed to avoid the potential long-term consequences of subnational borrowings of fiscal sustainability and macroeconomic stability. He stated that FRA 2007 was enacted to ensure the coordination of the national economy policy between various tiers of government. The SGF expressed that the ACT also enables the monitoring of agencies that were off budget, but whose activities had significant impact on fiscal policies. He lauded FRC for organising the meeting at a time when the Nigeria economy is faced with key challenges. Akume said that the country needed to develop strategy on how to structurally reform the economy, move labour and economic resources from low productivity to high productivity sector. “The dialogue is justified, as the government is damning to get things right from the beginning to avoid mistakes that have dragged the nation into huge domestic and foreign debt. “Accordingly, this particular direction is to ensure that the nation follows the laid down rules and regulations, in order to ensure prudence, transparency and accountability in the management of public funds and also to depart from such practices that have left so much debt for successive government,”: he said. Earlier, the Executive Chairman, FRC, Mr Victor Muruako, said that banks and financial institutions in the country must ensure that their lending practices consistently comply with provisions of the FRA.  Muruako, a lawyer, said that to eliminate ambiguity, Section 45 (1) of the FRA, all banks and financial institutions shall request and obtain Proof of Compliance with the provision of the Act before lending to any government in the federation. Stakeholders at the dialogue include the representatives of NGF, Nigeria Deposit Insurance Corporation, Chief Compliance (NIDC) Officers, Chief Risk Officers, Chief Legal Officers and Chief Executive Officers of banks, among others.

Nine states yet to implement Fiscal Responsibility Act -Chairman

The Fiscal Responsibility Commission (FRC) has said that many states in Nigeria are yet to implement the Fiscal Responsibility Act. The Chairman of the Commission, Mr. Victor Muruako, said this during an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja. He said that some states had passed the law, but were yet to set up fiscal responsibility agencies. “Some did not exactly pass the law, they just tried to have it, and even some that passed it just have it on record and are yet to implement the law. “As we speak about 26 states have adopted the law and are at various stages of implementation. “For some states, their Governors have not signed the law, some that have signed it into law are yet to set up the agencies, so as we speak it’s s a work in progress,” he said. He said the domestication of the Fiscal Responsibility Act was necessary to promote prudence in the management of resources in states. “When the need arose for the Federal Government to bail out states, there was an agreement of two conditions that must be met. “Part of which is the need for the sub-nationals to engage in reforms; one of the reforms is to pass the fiscal responsibility law, Audit law, and Procurement law at their level,” he said. Muruako commended the Nigerian Governors Forum for creating an enabling platform for peer review at sub-nationals. He said that the Commission was engaging the Forum to ensure that all states adopt and implement the Fiscal Act. “The forum has been a veritable forum to assist and they have done a lot to ensure that states engage in reforms,” he said.