In all, the NBS
noted that all the 36 states and the Federal Capital Territory, Abuja,
generated a total of N1.17 trillion in fiscal year 2018. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Considering the financial obligations
confronting them, that amount is grossly insufficient, even with the monthly
allocations from the centre. About three years ago, no fewer than 26 states
owed workers’ salaries. Not only that, social infrastructure in the states is
in tatters primarily because governments depend morbidly on the money being
shared from crude oil revenues.
Several states are
consistently unable to raise their IGR profile as the years go by and
obligations pile up. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html In the year under consideration, 15
states generated N10 billion and below internally. Kebbi, Adamawa, Borno,
Ekiti, Nasarawa, Katsina, Ebonyi and Taraba all oscillated between N4 billion
and N7 billion. Factoring in inflation, the figures are ridiculous.
Nevertheless,
there is some consolation. Lagos raked in N382.18 billion in 2018, garnering a
growth of 14.4 per cent in contrast to the N333.96 billion it earned in 2017.
Lagos, being Nigeria’s economic capital and Africa’s seventh largest economy,
has developed a niche for generating revenue independent of the Federal
Government, though it could perform far better. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Oil-rich Rivers netted N112.7 billion
in 2018, achieving a growth of 26.03 per cent from the N89.4 billion it
realised the previous year. Except Ogun, which generated N84.5 billion and
Delta, with N58 billion in 2018, the rest of the states generated between N11
billion and N24 billion annually.
For the first
time, Ondo State hit the N24 billion IGR mark in 2018. With a 126.83 per cent
increase, it recorded the biggest leap of all the states as, in 2017, the state
had generated just N10.9 billion. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Ondo is trailed by Bauchi, Imo and
Sokoto, which grew their IGR in 2018 by 121.79, 117.26 and 108.03 per cent
respectively. In spite of this, it is not that these states have discovered a
winning formula to their crushing economic malaise as they are far off from
their potential.
Currently, the
states just essentially exist to pay the salaries of civil servants and
political office holders, who constitute a minute fraction of their citizenry. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html This is wrong. It means they do not
provide basic education, affordable health services, good roads, security,
potable water or housing in their domains. Since the economic crisis instigated
by the crash in oil prices in the international market (in 2014), the Muhammadu
Buhari administration has had to channel an extra-statutory bailout of N1.75
trillion to the states.
Despite all this,
states do not feel under pressure to rip up their IGR formula that has levied
extreme poverty, joblessness and underdevelopment on their citizens. For
example, Akwa Ibom State is only surviving because of its vast oil deposits,
from where it gets extra revenue from the 13 per cent derivation fund monthly. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html That extra income has not made much
impact: at 37.7 per cent or 1.67 million unemployed, it had the highest jobless
rate among the 36 states nationwide in Q3 2018.
In truth, however,
no state in Nigeria should be poor. Experts stress that Kogi, which increased
its IGR by 71 per cent from 2017 to 2018 at N19.3 billion, is home to the
widest variety of solid mineral deposits among the 36 states. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Yet, it is unable to generate enough
income to pay salaries. It should seize the moment as the Federal Government
has liberalised the mining sector. Kogi, Zamfara, Nasarawa, Plateau and Niger,
and other states where mineral deposits are lying fallow, should collaborate
with foreign investors to get things going.
Although Lagos is
the clear IGR leader, it should be concerned that it has yet to close the
loopholes where its revenues are leaking. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Take taxation: in 2017, Governor
Akinwunmi Ambode deplored a situation that saw only 600,000 out of the 22
million residents of Lagos paying their taxes. This should not be tolerated
anymore.
Modern governance
is sustained by taxation. The United States Office of Management and Budget
stated that out of the $3.64 trillion the American government projected to
generate in fiscal year 2020, income tax would contribute $1.82 trillion or
over half of it. Corporation taxes would add just $256 billion. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Lagos should tighten its tax system,
which currently allows a majority of its residents to evade taxes. It is a
critical assignment for the governor-elect, Babajide Sanwo-Olu.
With the rise in
oil prices projected to be ephemeral, all states should concentrate on their
areas of comparative advantage in the bid to build up their IGR to cope with
the implementation of the N30,000 new minimum wage. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html The states in the North should
prioritise modern agriculture methods, utilising the Federal Government windows
like the Anchor Borrowers Programme to cultivate rice, sorghum, tomato, fruits,
vegetables, pepper and other food crops, adding value to the raw products. They
should discourage nomadic livestock rearing, which is fostering crisis all over
the country, by encouraging ranching.
In the South, states like Edo and Imo
should revive their palm produce ventures. They should develop their
infrastructure, enticing foreign direct investment in the process. They should
see themselves as centres of economic development, just like California, an
American state, which is the world’s fifth largest economy with a GDP of $2.7
trillion. (Punch)
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