With a declining GDP growth rate (-2.06%) it is no news that Nigeria is officially in a recession. The key sectors of the Nigerian Economy are crumbling, and the inflation rate is steady rising a little above 17%.
The downturn of crude oil prices affected Nigeria’s fiscal position and took a toll on the State governments, mainly distressed with a declining allocation from communal resources.Despite the massive bailout funds from the FG to support the States, many of them still struggle to meet basic obligations; salaries, contractors’ payments and debt repayments.
There is no better time to promote sustainable growth and inclusive development of states in Nigeria. State Governments must develop ingenious diversification strategies to grow their finances.
Data from the National Bureau of Statistics indicated that few states managed to increase their internally generated revenue in 2015.
The 2015 figures showed Ogun state records an impressive growth, almost doubling its 2014 figures, while other States in the zone including Lagos experienced a discernable dip in income.
Lagos however, remains the biggest racketeer when it comes to internally grown revenue, making it the richest of all states across the federation.
All States in the Zone except Edo experienced a decline in revenue generation, as seen within 2014 and 2015. Edo state managed to increase its proceeds by over N2 billion within a year. Although Rivers State is ranked as the second highest earner, following Lagos with over N82 billion, records reveal the state suffered a massive decline in revenue, a loss of over N7 billion.
Anambra State remarkably grew its revenue base by 29.2%, a sharp rise from N10.4 billion in 2014 to N14.7 billion in 2015. While Imo experienced the worst deficit in revenue, it fell short of over N2.6 billion from its 2014 generation.
Sadly, all States in the zone but Sokoto experienced a downturn in their revenue aggregate. The highest earner Sokoto, grew it’s income by over N606 million. Kaduna however, recorded the biggest plunge, loosing over N1.2 billion within 2014 and 2015.
Despite security challenges during the period under review, Borno State grew its revenue by 21.8% from N2.7 billion to N3.5 billion in 2015.
Bauchi and Taraba followed suit in the zone; the states improved on their 2014 figures by 10.8% and 8.5% respectively. Yobe emerged as the poorest performer in the region losing over N822 million, a drop of about 36.5% from its 2014 revenue aggregate.
Kwara emerged as the poorest performer of all the states in Nigeria with the biggest plunge (N5.2 billion) in revenue base within 2014 and 2015. Plateau followed suit in the zone, the state’s IGR dropped by 19.4% from its 2014 figures.
Even with the VAT proceeds and monthly allocations from the FG, States governments must develop an efficient tax collection system; which is just clear, convenient and inexpensive for the states to increase their income.
They must initiate policies to encourage small businesses and look inwards to explore essential natural resources -solid minerals.
After all, our national stability is judged by the joint stability and growth of constituent states.