Dismiss Buhari’s new loan request, SERAP tells NASS – :::… The Tide News Online :::…
Rivers State became the top subnational in the 2021 overall tax performance ranking.
The rankings were included in the annual BudgIT State of States report released yesterday.
BudgIT is a non-governmental organization (NGO) that focuses on the tax performance of federal and state governments across the country.
In its âState of States Report 2021,â BudgIT noted that Rivers State leads the overall 2021 budget performance ranking, while adding that only three states in the country can meet their obligations in this area. operating expenses from their income.
Rivers State again topped the overall 2021 budget performance rankings despite the budget shocks induced by Covid-19 on its IGR, indicating that this state’s fiscal fundamentals, relative to others in the country , are managed with more caution.
âTwo states did so, as new entrants in the Top 5 category of the 2021 overall ranking – Ebonyi state came out in 2nd position; up from 6th position in the 2020 ranking, and Kebbi State emerged in 5th position, against 11th position in 2020 â.
He said the economic shocks of the Covid-19 pandemic took a toll on states’ Internally Generated Revenue (IGR) and their share of federal government collected revenue in 2020, lowering their cumulative IGR by 3.43 percent, with the exception of Lagos State which recorded 5.08 percent. Growth in IGR over the period.
According to the report, âthe fiscal fundamentals of this state (Rivers), compared to others in the country, are being managed with more caution. “
Overall, two states – Ebonyi and Kebbi – ranked among the new entrants in the top 5 category.
This was in large part due to the growth of the IGR of the two states, as recorded by the NBS.
Ebonyi State increased its IGR by 82.3%, from 7.5 billion Naira in 2019 to 13.6 billion Naira in 2020, while Kebbi State increased its income by 87, 02%, from 7.4 billion naira in 2019 to 13.8 billion naira in 2020.
However, Ogun State (now 19th) and Kano State (now 22nd) dropped out of the Top 5 category due to a sharp drop in their IGR in 2020.
Only three states in the country could meet their operating expense obligations with a combination of their IGR and Value Added Tax (VAT) as measured in the âIndex Aâ ranking of BudgIT.
These are Lagos, Rivers and Anambra.
According to the NGO, âFor this year’s report, we looked at the fiscal health of states using four key metrics, namely; the capacity of States to cover their operating expenses with IGR and VAT, the capacity of States to cover their operating expenses and the repayment of their loans with their total revenues, the budgetary room for maneuver available to States to borrow more and the extent to which each state prioritizes capital spending over recurrent spending.
âCumulatively, the total debt burden of the 36 states increased by 472.63 billion naira (or 8.78%), from 5.39 trillion naira in 2019 to 5.86 trillion naira in 2020. This is largely due to the volatility of exchange rates which saw the value of the naira drop from 305 naira. .9 / $ 1 in 2019 to N380 / $ 1 as of December 31, 2020.
“The most indebted states abroad have been hit hard due to negative exposure to exchange rate volatility.”
The report identified states as: Lagos, Kaduna, Edo, Cross River and Bauchi.
In addition, five states accounted for more than half (or 63.63% or 300.7 billion naira) of the net increase in subnational debt year over year of 472.63 billion naira for all states between 2019 and 2020: states are Lagos, Kaduna, Anambra, BÃ©nouÃ© and Zamfara.
âBased on the 2020 revenues of each state, five states prioritized infrastructure investments by spending more on capital spending than on operating expenses.
âThe states are Ebonyi, Rivers, Anambra and Cross River states to the south and Kaduna state to the north.
“These states were at the top of the ‘Index D’ ranking.”
According to the NGO, 19 states, including eight oil-producing states, saw their investment spending decline year on year, while seventeen states were able to further improve their investment in capital spending, compared to 2019 levels despite the budgetary constraints induced by Covid19.
âUndoubtedly, the economic shocks of the Covid-19 pandemic have had adverse consequences on states’ Internally Generated Revenue (IGR) and their share of revenue collected by the federal government in 2020; therefore, the need to explore options for rebuilding subnational economies cannot be overstated, âBudgIT said.
The BudgIT report said, âThe economic shocks of the Covid-19 pandemic have taken a toll on states’ IGR and their share of revenues received by the federal government in 2020. Cumulatively, all 36 states have seen a decline. from 3.43% of their IGR from 1.26 trillion N in 2019 to 1.21 trillion naira in the year 2020 under review.
âIn total, 18 states have seen their IGR drop year-over-year while 18 more states may weather the pandemic-induced fiscal storm, boosting their revenues – in some cases by as much as 87.02%.
âIt is worth noting the state of Lagos, which although being the epicenter of the pandemic; experienced 5.08% growth in IGR, proof of the resilience of its tax strategy.
âIn the 2021 performance ranking, two states dropped out of the Top 5 overall; Ogun State (now 19th) and Kano State (now 22nd), due to a sharp drop in their IGR in 2020 â.
Regarding the comparative viability of states, BudgIT said, âOnly three states in the country can meet their operating expense obligations with a combination of their IGR and Value Added Tax (VAT), these states are Lagos , Rivers and Anambra.
âOn the other hand, the States at the bottom of the ranking must do more to consolidate quickly on the strategies underway to improve their IGR and by extension, their viability as federating entities. This is necessary given the comparative size of their operating expenses and the global push to move away from fossil fuels like crude oil, a key source of distributed revenue from the federal government.
“Those states at the bottom of the rankings include Jigawa, Delta, Benue, Taraba and Bayelsa.”