As state governments continue to lament the impact of dwindling revenue on their ability to fulfil their campaign promises, there is need to remind them that they had received over N1.2 trillion in the first eight months of their administration from May to December, 2015. And that the state chief executives should account for how well they have utilized these scarce resources for the benefit of their people.
Data from the National Bureau of Statistics (NBS) show that the following five states have the highest allocations in the following order: Akwa Ibom, N100.91 billion; Delta, N82.96 billion; Lagos, N76.87 billion; Rivers, N72.34 billion and Bayelsa, N61.85 billion.
Osun, Nasarawa, Ekiti, Kwara and Ebonyi are the bottom five with gross Federal Accounts Allocation Committee (FAAC) allocations of N24.64 billion, N24.01 billion, N23.65 billion, N23.64 billion and N23.57 billion respectively. Our investigation reveals that despite these amounts, besides internally generated revenue, most of the states are still struggling with the payment of workers’ salaries because they are heavily indebted to financial institutions and are using substantial parts of their FAAC allocation in servicing these debts. The ratio of Irrevocable Standing Payment Order (ISPO) to Total Net FAAC Receipt, a measure of the proportion of a state’s FAAC allocation used to service contractual debt obligations shows that some states are using over 60% of their allocations in servicing debt obligations. Osun State topped the chart with an ISPO/Total Net FAAC Receipt of 64%, followed by Cross River, 28.60%; Lagos, 27.50%; Plateau, 23.60% and Ekiti, 22.10%. States with the least contractual debt obligations are Kaduna, 1.9%; Oyo, 2.9%; Nasarawa, 3.5%; Kogi, 7.5% and Ebonyi, 8%.
While Lagos has the capacity to substantially augment its revenue with Internally Generated Revenue (IGR), the same cannot be said of Osun, Cross River and Ekiti states currently.
An analysis of the distribution of the nation’s wealth by geo-political zone shows that the South-South got the largest share of N375.89 billion (29.41%), followed by the North West, South-West, North East, North Central and South East which got N222.93 billion, N216.44 Billion, N165.18 billion, N163.7 billion and N134.16 billion respectively. The South East has the least allocation of about 11%.
An analysis of the Average Revenue Per Person (AVRP), a measure of federal resources allocated to each individual, shows a wide disparity among the six geopolitical zones. The South-South zone which has the largest allocation stands out with an AVRP of N17,887 compared with the North-West zone with N6,229, the lowest in country. North-East has the second largest AVRP of N8,189.61 followed by the South-East, North-Central and the South-West with N8,189.61, N8,077 and N7,847 respectively. How well the governors in zones with largest share of the national wealth are utilizing these resources for the benefit of their people is a question begging for an answer.
While the South-West zone came third and fifth in terms Federal Allocation and AVRP, it remains the zone with the largest Internally Generated Revenue in 2015. According to data from NBS, the IGR by states (excluding Ebonyi) amounted to N682.67 billion with the South-West zone accounting for about 50% of the IGR generated by Subnational Government.
A breakdown of the figures by states put Lagos as having the largest IGR of N268.22 billion and accounting for 39.29% of the total IGR by states in 2015. Lagos was followed by Rivers, Delta, Ogun and Edo State with N82.11 billion, N40.81 billion, N34.60 billion and N19.12 billion, that is,12.01%, 5.97%, 5.07% and 2.8% respectively. Yobe, Zamfara, Ekiti, Borno and Kebbi states recorded the least IGRs of N2.25 billion, N2.74 billion, N3.3 billion, N3.53 billion and N3.56 billion respectively.
An Analysis of the Average IGR per person (AIP), that is, what each person contributes to the IGR, shows the South-West has the largest with N9, 045, followed by South-South, South-East, North-Central , North-West and North-East with figures of N8,485, N3,161, N1,915, N1,359 and N1,295 respectively.
These exposed the South-West and South-South as the most advanced regions economically while the North-East and North-West zones remain the least economically advanced zones. The governments of respective states in the North-West and North-East geopolitical zones need to design a roadmap to boost the economic growth in the regions, especially with the consistent decline in federal allocations to states as a result of sharp fall in oil prices in the international market.