Bayelsa, Kebbi, Katsina, Akwa-Ibom, Taraba, and Yobe States are facing insolvency and heavily depend on the monthly revenue allocations from the Federation Account Allocations Committee (FAAC). These states, known for their poor internal revenue generation, failed to generate even 10% of their cumulative revenue from the federation account in 2022 compared to their federal allocations.
Former Presidents Goodluck Jonathan, Muhammadu Buhari, and the current Senate President Godswill Akpabio hail from Bayelsa, Katsina, and Akwa Ibom States, respectively. The recently released seventh Annual States Viability Index (ASVI) report by Economic Confidential emphasizes that, without the monthly FAAC disbursements, many states, including these six, would remain unviable.
The viability of these states heavily relies on the federally collected revenue, primarily from the oil sector. The internally generated revenue (IGR), crucial for state sustainability, includes funds from Pay-As-You-Earn Tax (PAYE), direct assessment, road taxes, and revenues from ministries, departments, and agencies (MDAs).
According to the report, the IGR of the 36 states in the federation totaled N1.8 trillion in 2022, a slight increase from the N1.76 trillion recorded in 2021. Notably, Lagos State’s IGR of N651 billion surpassed the combined IGR of 30 other states, underscoring the disparity in revenue generation across the country.
