From Uche Usim, Abuja
The Nigerian Governors’ Forum (NGF) has lamented the growing insecurity in the country, saying it was the greatest obstacle stacked against states’ genuine efforts to swell their Internally Generated Revenue (IGR).
Closely linked to insurgency is the addiction to federal monthly payouts which in itself is being affected by the volatilities of the international crude oil market.
Director General of the Nigerian Governors’ Forum, Asishana Okauru, said this in Abuja at a workshop organised by the States’ Fiscal Transparency Accountability and Sustainability (SFTAS) Programme Coordination Unit of the Federal Ministry of Finance, Budget and National Planning at the weekend.
Okauru who was represented by the Senior Programme Manager, NGF/SFTAS, Lanre Ajogbasile, spoke on the topic: “Improving Internally Generated Revenue (IGR): Trend and Emerging Reforms.”
He blamed the deteriorating insecurity situation in the country and other economic conditions, like declining value of the Naira, as some of the key factors affecting the business environment and their overall productivity and performance.
In recent times, thousands of persons have either been killed or kidnapped on a daily basis. Aside from the Boko Haram/ISWAP insurgency that has plagued the North-east region for over a decade, virtually all parts of the country currently battle one form of insecurity.
Okauru said although Nigeria was still recovering from the impact of a number of negative fiscal and macroeconomic conditions that have influenced the fiscal sustainability at all levels of governments, the pressure on the states remains enormous.
He attributed the pressures on the fiscal capacities of the states to their over-dependence on the monthly allocations from the Federation Accounts, which is often affected by the unpredictable movements in the earnings from crude oil exports as a result of the volatility in crude oil prices at the international market.
“The impact of this pressure has been exacerbated by long years of increases in government permanent expenditures arising from increased cost of governance, new minimum wage, rising debt service and mounting fuel subsidy payments,” he said.
Besides, Okauru said the global coronavirus pandemic also took a massive toll on the economic activities of governments the world over, thereby impacting the internally generated revenue capacities of the sub-national governments.
Reviewing the performance of the states and Federal Capital Territory in terms of their IGR, the NGF DG noted a decline by N28.15 billion or 2.1 percent, between 2019 and 2020, primarily as a result of the. pandemic
In terms of Tax-to-GDP ratio in Nigeria, the NGF Director General quoted the Organisation for Economic Co-operation and Development (OECD) estimates for 2019 to have been six percent.