States’ IGR declines due to crude insecurity and volatility -NGF – The Sun Nigeria
Since Uche Usim, Abuja
the The Nigerian Governors Forum (NGF) has lamented the growing insecurity in the country, saying it is the biggest hurdle stacked against genuine efforts by states to increase their internally generated revenue (IGR).
Closely related to the insurgency is reliance on federal monthly payments which, in itself, is affected by volatilities in the international crude oil market.
The Managing Director of the Nigerian Governors Forum, Asishana Okauru, said this in Abuja during a workshop organized by the Fiscal Transparency and Sustainability Program (SFTAS) Coordinating Unit of the Federal Ministry of Finance, Budget and National Planning this weekend.
Okauru, who was represented by Senior Program Manager, NGF/SFTAS, Lanre Ajogbasile, spoke on the theme: “Improving Internally Generated Revenue (IGR): Emerging Trends and Reforms”.
He blamed the deteriorating insecurity situation in the country and other economic conditions, like the falling 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 people have been killed or abducted daily. Aside from the Boko Haram/ISWAP insurgency that has plagued the North East region for over a decade, virtually all regions of the country are currently struggling with some form of insecurity.
Okauru said that although Nigeria is still recovering from the impact of a number of adverse fiscal and macroeconomic conditions that have influenced fiscal sustainability at all levels of government, the pressure on states remains enormous.
He attributed pressures on states’ fiscal capacities to their over-reliance on monthly allocations from Federation Accounts, which is often affected by unpredictable movements in crude oil export revenues due to price volatility. crude oil. to the international market.
“The impact of this pressure has been exacerbated by long years of increased government permanent spending resulting from the rising cost of governance, the new minimum wage, rising debt servicing and the ‘increase in fuel subsidy payments,’ he said.
In addition, Okauru said the global coronavirus pandemic has also taken a heavy toll on the economic activities of governments around the world, thus affecting the internally generated revenue capacities of subnational governments.
Reviewing the performance of the states and the Federal Capital Territory in terms of IGR, the NGF DG noted a decline of N28.15 billion or 2.1%, between 2019 and 2020, mainly due to the. pandemic
In terms of the tax-to-GDP ratio in Nigeria, the chief executive of the NGF cited the Organization for Economic Co-operation and Development (OECD) estimate for 2019 as being 6%.