This morning, I watched a little bit of the IGR (internally generated revenue) roundtable shown by AIT. Key speakers included Governors Fashola (Lagos), Oshiomhole (Edo) and Imoke (Cross River). As usual, Gov. Oshiomhole was on the mark, arguing why it is important to “annoy” the wealthy with tax: to enable the majority enjoy the dividends of democracy; to give governors an independent voice in Nigeria; and to move Nigeria away from the mono-crop nonsense whose dangers our leaders don’t appear to see.

Watching the array of personalities invited to speak at the event, I was tempted to ask: where is the Governor of Sokoto State? According to the 2008 CBN Annual Report, Sokoto is running second to Lagos in terms of internal revenue harvest as a percentage of total revenue: While Lagos’ IGR is 63.5%, Sokoto State is 46.6%. Ogun State (again, the governor is only a discussant at the roundtable, not a key speaker), ran a distant third with 27.5%.

This statistic also makes one wonder at the oil producing states (Delta, Rivers, Bayelsa, Akwa Ibom, Ondo, etc). With all the money that passes into the hands of corporate and private individuals in their states, why are they not in the forefront of the war to garner internal revenue.

Answer: Their governors are more interested in having their eyes firmly fixed on Abuja, where the national cake is shared each month.


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One thought on “Indolent States”
  1. Are they really indolent states? When the states are 'given' allocation [money] because of revenue from oil/gas, I can see why some of them become lazy and fold in only to expect the subvention. It is a welfare federation, that runs on the wish and caprice of whoever occupies Aso Rock. That is prescription for disaster and malfeasance. What Nigeria experiences because of this sort of financing government, produces poor results. And it happens in any country regardless of level of development – dependence due to 'a petty cash operation'.

    What needs to happen is that Nigeria's constitution that unduly places the burden of treasuries of the states and the federal on a single commodity revenue be changed, and internally generated sources enhanced and complemented by a 'matching' funding federal system. What I mean: For every naira that is internally raised from properly legislated, administered and managed tax system, the federal government will match that fund one-to-one. Since many Nigerians take pride in announcing how expensive their homes are, why not tax these homes at a flat rate and provide such revenue to the local authorities to help in service delivery? The revenue from oil/gas or any other minerals, should be devoted to national infrastructure building for health, education, telecommunication, defense, police – public safety, and so forth. A portion of the revenue set aside to help buy-down interest rate charged for capital development so that Nigerians do not pay 40% on borrowed funds.

    When the people's money i.e. taxes, are used to run state governments with matching fund given based on what is raised internally, sense of accountability will take root and may help reduce the free-for-all and loose federal financial system that encourages stealing. Money from undue resource such oil/gas, is seen as free money because Nigerians did not do anything for that to be where it is. It's like 'manna' from Heaven which is more like from 'hell' because whoever gets their hands on it, considers it theirs. When the Cocoa House, first high rise in Nigeria was built, it was not because of oil but revenue from sale of cocoa, paid for by farmers.

    In developed nations, municipal revenue [property taxes], constitutes up to 45% of revenue for municipal/local authorities. The rest come from fees, fines and user charges paid by companies that locate within a city limits. As long as everything is done from and in Abuja on behalf of the states, and Abuja sees itself as the nerve center of the country's political and financial well being, Nigeria will never realize its potential especially due to the attitude given to revenue from oil and gas.

    Lagos by now, should be way ahead because it is a beneficiary of Nigeria's collective efforts and should be giving money back to the center.

    ejike e okpa ii
    Next Generation Fellow

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