Nigerian daily newspapers on August 8 reported that the Senate had recommended the creation of new states. It was, however, later clarified by the Senate that it had not recommended the creation of new states but declared its readiness if the motion is pushed through. On the economic front, the Nigerian economy faces a two-pronged battle with a rising inflation rate and economic fallout of the ongoing COVID-19 pandemic. With these, should we even be considering creating more states at this time?
The creation of more states is not just a political question. It is also an economic question. In an April 2021 report by the National Bureau of Statistics on the Internally Generated Revenue of the 36 states and the Federal Capital Territory in 2020, a total of N 1.31 trillion was generated by all the states. Out of these states, just three viz, Lagos, Rivers and the Federal Capital Territory generated almost half of the amount, generating 32.08%, 8.97%, and 7.05%, respectively. In monetary figures, just Lagos and Rivers states generated above N100 billion, while 12 states generated above N25 billion.
Furthermore, 17 states generated below N15 billion, as six of them Yobe, Taraba, Adamawa, Gombe, Jigawa and Ekiti generated below N10 billion. In terms of contributions of the IGR to total revenue, most states get the bulk of their revenue from the Federal Accounts Allocation Committee, a committee tasked with monitoring the accruement and disbursement of the federal revenue. Only Lagos and Ogun states as well as Abuja have an IGR more than what they receive from FAAC. Meanwhile, 20 states get at least 75% of their revenues from FAAC….
To read more, check full article on The Punch.