New Telegraph

Analysts: Rising insecurity to hurt states’ IGR

Growing insecurity in the northern part of Nigeria is likely to lead to a further reduction in the internally generated revenue (IGR) of states located in that part of the country, analysts at Cowry Asset Management Ltd have said.

The analysts made the prediction in a report obtained by New Telegraph at the weekend. Commenting on the National Bureau of Statistics (NBS’) recent report titled: “Internally Generated Revenue at State Level,” which showed that that states’ IGR for the FY’20 fell year-on-year (y-o-y) by 1.93 per cent to N1.31 trillion from N1.33 trillion in FY’19, the analysts said: “We note that the decline in states’ total IGR was largely due to depressed economic activities, which was exacerbated by COVID-19. “Nevertheless, we saw a surprise increase in PAYE despite the recent rise in unemployment rate.

It appears that staff in the health, information technology and financial sectors got pay raises as corporates operating in those sectors printed better perfor-mance despite the coronavirus outbreak in the year under review. “Going forward, we expect states’ IGR to further moderate, especially for the states in the northern part of the country, given the worsening insecurity – this is more so as the death of Chadian President, Idriss Deby, elevates fears of arms influx into Nigeria amid too many militia groups operating in that country.”

Their analysis of the NBS data shows that even without the issue of rising insecurity, most northern states are not doing well in terms of IGR generation. For instance, the analysts noted: “Four states, which recorded declines in IGR include Benue, Sokoto, Kwara and Jigawa.

Their IGRs moderated by 41.38 per cent to N10.46 billion, 37.93 per cent to N11.79 billion, 36.03 per cent to N19.60 billion and 32.95 per cent to N8.67 trillion respectively in FY’20. “Yobe, Taraba, Adamawa, Gombe, Jigawa and Ekiti states generated the least IGRs of N7.78 billion, N8.11 billion, N8.32 billion, N8.54 billion, N8.67 billion and N8.72 billion respectively.”

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