Only three Nigerian states can survive without the federal government’s help.
BudgIT’s paper, titled “State of States, 2021 Edition: Fiscal Options for Building Back Better,” was released on Tuesday.
These three states, according to BudgIT, are Lagos, Rivers, and Anambra.
The report said, “Only three states in the country can meet their operating expenses obligations with a combination of their IGR and Value Added Tax as measured in our ‘Index A’ ranking; these states are Lagos, Rivers, and Anambra and they appear at the top of the ‘Index A’ ranking.”
States that score high on the organization’s index A have a lower reliance on federally dispersed funds for their operations and are more sustainable as independent entities, according to the organization.
The top three states are Lagos, Rivers, and Anambra, whereas the bottom three are Benue, Taraba, and Bayelsa.
BudgIT said, “These states at the bottom of ‘Index A’ ranking include Jigawa, Delta, Benue, Taraba and Bayelsa.
“Nevertheless, all Nigerian states still need to work hard to build economic prosperity and create more jobs in their states to ensure that there is more money in circulation and economic activities that can be taxed to improve their IGR.”
According to the organization, all 36 states reported a 3.43 percent drop in 2020 IGRs (N1.21 trillion) from (N1.26 trillion) in 2019.
According to the report, 18 states saw their revenues fall year over year, while the remaining 18 states saw their revenues rise – by as much as 87.02 percent in some situations.
According to BudgIT, the states’ overall debt burden grew by N472.63 billion (or 8.78%) from N5.39 trillion in 2019 to N5.86 trillion in 2020.
The increase in total subnational debt was attributed to exchange rate volatility, with the naira’s value rising from 305.9/$1 in 2019 to 380/$1 by December 31, 2020, according to IT.