… ‘Borno, Bayelsa, Taraba record worst IGR in 2019’
THE Revenue Mobilisation Allocation and Fiscal Commission has expressed concern over the inability of states to boost their low Internally Generated Revenue despite series of support from the commission.
It also expressed worry that the Federation Account was currently overstretched, owing to the persistent depletion of the account.
The commission lamented the rate at which demands were made from the account by the three tiers of government, describing it as alarming, adding that the trend needed to be checked.
The RMAFC Chairman, Elias Mbam, made the call while receiving an Annual States Viability Index from the Editor-in-Chief of the Economic Confidential, Yushau A. Shuaib, in his office, in Abuja.
According to the RMAFC boss, the Federation Account is overstretched by the over-dependence of the tiers of government and hence the need for state governments to develop strategies to boost their internal revenues.
The Federation Account is currently being managed on a legal framework that allows funds to be shared under three major components.
They are statutory allocation, Value Added Tax distribution; and allocation made under the 13 per cent derivation principle.
Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments, 20.60 per cent.
The framework also provides that Value Added Tax revenue be shared thus: FG, 15 per cent; states, 50 per cent; and LGs, 35 per cent.
Similarly, extra allocation is given to the nine oil producing states, based on the 13 per cent derivation principle.
To reduce the stress on the Federation Account, Mbam called on state governments to develop strategies to boost their internal revenues.
The over-dependence in the monthly Federation Account allocation, Mbam said, had made it imperative “for state governments to boost their Internally Generated Revenues “.
He said, “The annual ASVI report, apart from providing a good source of information to the general public, also has been identified as a source of information that would drive RMAFC on its mandate to encourage states of the federation to improve their Internally Generated Revenue.
“I have come to realise that Economic Confidential has become a household name and its reports that are factual and authoritative should be useful, especially in guiding states whose revenues keep dwindling so that they can improve.”
Speaking on the report, Shuaib said it assessed and ranked states by their annual IGR in comparison to their receipts from the Federation Account Allocation.
He said the report had shown that “without the monthly disbursement from the Federation Account, many states cannot survive as the indices showed that about five states have very poor IGR that were far below 10 per cent of their receipts from the Federation Account.”
The states with the worst IGR performance in 2019, according to the report, are Katsina, Kebbi, Borno, Bayelsa and Taraba states.
Shuaib stated that apart from Lagos and Ogun states that ranked high in the revenue generation in 2019, more states had recorded impressive and encouraging IGR in 2019 compared to 2018.
The report showed that only Rivers, Kaduna, Enugu, Kwara and Zamfara states did well with regard to impressive revenue generation in 2019, compared to their IGR in the previous year, by improving more than 10 per cent.
