Despite the impact of COVID lockdown across Nigeria in 2020, Ebonyi and Kebbi performed excellently well, with growth in their internally generated revenue (IGR) above 80 per cent each.
Within the year, the 36 states and FCT earned N1.31 trillion in 2020 compared to N1.33 trillion recorded in 2019. This represents a downward trend of 1.93% year on year. In its Fourth Quarter and Full Year 2020, the National Bureau of Statistics (NBS) said Lagos state has the highest Internally Generated Revenue with N418.99bn recorded followed by Rivers (N117.19bn) while Yobe State recorded the least.
Ebonyi, Kebbi pulled a surprise
What is more surprising in the latest IGR report is Ebonyi and Kebbi’s moves towards fiscal sustainability. Between 2019 and 2020, Ebonyi and Kebbi recorded 87.02 per cent and 82.30 per cent growth in IGR respectively. While Ebonyi generated an IGR of NGN13.59 billion in 2020, Kebbi recorded N13.78 billion the same year. On a year-on-year basis, the two states beat Lagos, Rivers States in terms of IGR growth rate.
| States | 2019 (Billion) | 2020 (Billion) | % change |
| Ebonyi | 7.46 | 13.59 | 87.02 |
| Kebbi | 7.37 | 13.78 | 82.30 |
Analysis of the 2020 IGR report showed that the two states increased capacities in ramping up other tax components of their revenues. In the last three years, Ebonyi has continued to grow internal revenues. Within the period, the state’s PAYE (Pay As You Earn), Direct Assessment, Road taxes, MDAs revenue and other taxes recorded significant increases.
In 2018, Ebonyi recorded revenues of N6.14 billion. This increased to N7.46 in 2019 and N13.59 billion in 2020. Between 2018 and 2020, the PAYE, MDA revenues, and other tax components recorded a significant rise.
Kebbi, on the other hand, posted N4.88 billion, N7.37 billion, and N13.78 billion in 2018, 2019 and 2020, respectively. Increases were recorded in MDAs revenue and other taxes component of the IGR.
The impact of Ebonyi’s revenue increase can be attributed to the State government’s policy on IGR collection and payments in the state. In February 2020, the government domiciled all IGR payments and receipts to the Deputy Governor, Dr Kelechi Igwe, after allegations of fraud at the Ebonyi state Internally Generated Revenue (IGR) board.
The automation policy of the Kebbi State Board of Internal Revenue can also be ascribed to its successful revenue growth drive. Last year, it announced that it had automated revenue administration and collection in the state to curb fraud and leakages. However, there is still more to do in ramping up revenues from PAYE and Direct Assessment taxes.
2018 – 2020 IGR collection between Ebonyi and Kebbi States (Naira)
Despite positive results, the two states still rely heavily on monthly federal allocations. Analysis of the Federation Account Allocation Committee (FAAC) in 2020 showed that Ebonyi received N43.96 billion while Kebbi state received N51.18 billion from the federation account. To become economically viable, States need to intensify efforts to increase internal revenue with solid fiscal policies, widening the tax net, supporting small businesses to grow, and block leakages.
| States | 2020 IGR (N’Billion) | 2020 FAAC (N’Billion) |
| Ebonyi | 13.59 | 43.96 |
| Kebbi | 13.78 | 51.18 |
COVID-19 lockdown impacted on Lagos, Rivers, others
Despite recording the highest revenue in 2020, the COVID-19 lockdown took its toll on some states, including Lagos and Rivers States. Lagos recorded N418.99bn to emerge as the State with the highest Internally Generated Revenue, followed by Rivers. Compared to the previous year, Lagos IGR grew by 5.08 per cent, while River state IGR declined by 16.5 per cent.
Oyo state is an example of a state that capitalised on partial COVID-19 lockdown to ramp up revenues. The State recorded N38.04 billion in 2020, following Ebonyi and Kebbi as the states with the highest IGR year-on-year growth. In 2018 and 2019, it recorded N24.64 billion and N26.75 billion respectively.
The IGR of states shows the fiscal strength of each state and how each can function financially independent of the allocation from the federation account. Last December, Governor Kayode Fayemi and Chairman of the Nigerian Governors’ Forum said states are working to eliminate contractors handling IGR collection as part of reforms to boost their financial outlook. The positive impact of IGR growth is that it helps state governments to reduce domestic and foreign debts. It also provides more funds for fixing the infrastructural deficits across states and caters for the States’ wage bills.