The Federal Government on Monday raised the alarm over low level of Internally Generated Revenue (IGR) by state governments and declared Katsina, Kebbi, Borno, Bayelsa and Taraba States have become insolvent after their IGR collections were declared “extremely poor”.
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Chairman, Mr Elias Mbam, who raised the concern noted that the Federation Account was currently over stressed by the unending demands of the three tiers of government, urging states to evolve creative ways of fattening their IGR to lessen the strain on the federal purse.
The Annual States Viability Index (ASVI) listed Katsina, Kebbi, Borno, Bayelsa and Taraba States as those with the worst internally generated revenue (IGR) performance in 2019, thereby rendering them insolvent.
This is coming as the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) raised the alarm that the Federation Account is under intense pressure due to the demands made on the account by the three tiers of government.
The ASVI report, which was presented to the RMFAC Chairman, Elias Mbam, in Abuja Monday by the Editor-in-Chief of the Economic Confidential, Mr. Yushau A. Shuaib, showed that apart from Lagos and Ogun States that ranked high in revenue generation in 2019, more states recorded impressive and encouraging IGR in 2019 compared to 2018.
Shuaib stated that Rivers, Kaduna, Enugu, Kwara and Zamfara States did well with regards to impressive revenue generation in 2019 compared to their IGR in the previous year, by improving more than 10 per cent.
The ASVI report, he noted, assessed and ranked states by their annual IGR in comparison to their receipts from the Federation Account Allocation.
He said the report has shown that without the monthly disbursement from the Federation Account, many states cannot survive as the indices showed that five states are insolvent due to very poor IGR which were far below 10 per cent of their receipts from the Federation Account
Receiving the report, Mbam called on state governments to develop strategies to boost their internal revenue sources in order to reduce the stress on the Federation Account.
The Federation Account Allocation, he lamented, is overstressed by the over-dependence of the various tiers of government and hence the need for state governments to develop strategies to boost their internally generated revenue sources.
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 IGR.
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.”