According to a report by The PUNCH, approximately 25 states in Nigeria encountered a shortage in internally generated revenue (IGR) and faced a cash crunch in the first quarter of 2023. Data obtained from the budget implementation reports of each state revealed that these 25 states earned a total of N182.26 billion during Q1 2023. This amount reflected a 3.07% or N5.77 billion shortfall from the N188.03 billion generated in Q4 2022 when analyzed on a quarter-by-quarter basis.
While Nigeria has 36 states, the data for Q1 2023 is currently unavailable for Rivers and Sokoto. Akwa Ibom has no data for Q1 2022, while Kwara, Edo, Kaduna, Lagos, Bauchi, Zamfara, Yobe, and Ogun have no data for Q4 2022. Therefore, the analysis of internally generated revenue is limited to 25 out of the 36 states in the country.
The findings from The PUNCH report indicated that the 25 states had projected an IGR of N219.56 billion for Q1 2023. However, they only managed to generate approximately N182.26 billion, resulting in a revenue performance of 83.01%. This means that the revenue fell short by 16.99% as it failed to meet the states’ revenue targets. Nevertheless, these states did witness a 30.34% increase in revenue compared to the N139.83 billion recorded in Q1 2022.
The cash crunch and shortfall in internally generated revenue pose significant challenges for the affected states, as it limits their ability to fund various developmental projects and provide essential services. Experts say in order to mitigate this issue, these states will need to explore alternative revenue streams, improve tax collection systems, and enhance economic activities within their jurisdictions.
Economic watchers say the current financial situation underscores the importance of strengthening fiscal management and finding innovative solutions to enhance revenue generation at the state level. It is crucial for state governments to prioritize effective budget implementation, promote transparency, and seek sustainable strategies to boost their internally generated revenue.
