For decades, Nigeria has depended on crude oil to generate revenue which will be distributed to all 36 states of the federation. As oil revenue is dwindling, states in Nigeria are looking for other ways to generate revenue. Some states are still entirely dependent on oil revenue, while others have dabbled into other means of Internally Generated Revenue (IGR) to run their affairs smoothly. The IGR of these states are determined by several factors which include road taxes, pay-as-you-earn, direct assessment, revenue from ministries, departments, and agencies, and other taxes which are made of land-related fees. Let’s go ahead to take a look at the IGR of states in Nigeria.
What is IGR?
According to definitions.net, IGR is defined as funds or financial prowess from or accumulated from various means within a nation-state or country that is used for further maintenance and development. These IGRs are independent of the share each state receives from federal allocation. Most recent infrastructural developments are rooted in the huge internally generated revenues of the state from the previous year.
Top 10 states with the highest IGR in Nigeria
According to data from the National Bureau of Statistics (NBS), all 36 states in Nigeria recorded, including the federal capital, recorded a sum of N849.12 billion as internally generated revenue between January and June 2021. This is 38.5% higher than the N612.87 billion recorded H1 2020 and 26% higher than the N673.82 billion recorded H2 2020. This development results from the states’ efforts to generate revenue internally. Here are the top 10 states with the highest IGR in Nigeria:
1. Lagos State
Lagos is the commercial centre of Nigeria and the most populated state with over 9 million inhabitants. Hence, the state generates the highest IGR with an impressive N268.2 billion with N18,000 per population, making up about 31 percent of the total IGR in Nigeria. Most of the revenues are generated from taxes from top companies, salary earners, business owners, investments, and transportation, among others. According to the NBS, the revenue generated by Lagos is more than what the entire northern states generated and more than south-south and south-east put together. This means Lagos can stand as a country on its own.
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2. FCT, Abuja
The FCT, although not a state, follows Lagos with the second highest IGR with N69.1 billion. The nation’s capital has 3 million inhabitants with N12,173 per population and depends on taxes to generate internal revenue.
3. Rivers State
Rivers State is a major oil-producing state in the federation. The state is also the largest producer of petroleum in Nigeria with about N57.3 billion IGR and N6,621 per population. With over 9 million inhabitants, the state has been going through a steady decline compared to the previous year when it generated over N82 billion. The state’s major IGR is from crude oil.
4. Ogun State
Ogun State has N54.8 billion IGR, ranking it fourth according to the NBS. The state has over 6 million inhabitants, with N8,908 per population and unlike Rivers State, has witnessed an increase in revenue growth over the last couple of years. The state depends mostly on taxes from top companies and business owners, tourism, natural resources, and monies generated from the markets.
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5. Delta State
Delta State is another oil state. The state has a population of over 4 million and generates N41.9 billion IGR and N6,310 per population. Crude oil, tourism, and agriculture are the major sources of income for the state.
6. Kwara State
Kwara ranks sixth in IGR with about N18 billion generated in the last six months, according to Kwara State Internal Revenue Service (KW-IRS). This is a major leap from N16 billion for half year of 2021. With over 2 million inhabitants, the state has generated N4,307 compared to N4,606 and N2,600, recorded in the year 2019 and 2020 respectively. The major sources of income are tax, and social contributions with few generated from sales by the government, for instance, users’ fees for the provision of services, grants, and property income, among others.
7. Edo State
Edo State Internal Revenue Service (EIRS) disclosed that the state has hit N3 billion monthly IGR from N2.8bn in the first quarter of 2022. With an estimated population of over 3 million inhabitants, the state generated N3,640 per population compared to N3,362 and N2,970 in the year 2019 and 2020 respectively. Edo State is also an oil-producing state which means most of its income is from crude oil as well as tourism and real estate investments.
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8. Cross River State
Cross River State generated over N16 billion over the past two years. The state which is the only one that doesn’t produce crude oil in the Niger Delta has a population of over 2 million inhabitants. Under the present leadership of Governor Ben Ayade, Cross River generated N3,302 per population compared to the N3,967 and N1,854 reported in the year 2019 and 2020 respectively. The major sources of revenue are tourism, agriculture, and tax.
9. Ondo State
Ondo State is the only oil-producing state in the South-West of Nigeria. With a population of less than 500,000 inhabitants, the state generated N3,299 for the first half of the year 2021 compared to N3,717 and N2,579 generated in the year 2019 and 2020 respectively. Ondo, which is also one of the major cocoa-producing states in Nigeria, gets its major income from crude oils, charges on forest trades, and taxes among others.
10. Nasarawa State
Nasarawa State completes the top 10 states with the highest IGR in Nigeria. With a population of almost 2 million inhabitants, the state generated N3,242 per population for the first half of the year higher than the N1,754 and N2,074 generated in the year 2019 and 2021 respectively. The major source of income is agriculture.
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36 states with their IGR
See the official list of the 36 states and their ranking according to their IGR as of 2021 here.
Finally, from what has been listed above, most states in Nigeria have witnessed a steady decline in terms of IGR over the past couple of years. Only Lagos State has been consistent with its income growth. It’s no news that the COVID-19 pandemic introduced a global economic crisis. Most states in Nigeria have been affected. Other factors such as insecurity, and corruption among others have contributed to the decline in the nation’s IGR.
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