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Identify inadequate IGR as a bane for many states

As governors from the 36 states sign the 2024 spending bill and lawmakers put the final touches on the bill to forward it to governors for approval, analysts are pleading with state governments to use rhetorical rhetoric. It calls for ensuring proper implementation of the spending bill. budget.

It identifies poor revenue and over-reliance on the federal budget as the main reasons why many states put colorful tags on their annual budgets but ultimately achieve little. Despite this.

For example, this year 2024, Abia State has named its budget as “New Beginnings Budget”. Adamawa State — Re-engineering budget. Akwa Ibom State — Budget for growth and expansion. Anambra State — Budget to change gears. Bauchi State — A budget of consolidation and new focus. Bayelsa State — A budget for sustainable and shared prosperity. Benue State — Budget for infrastructure, development, employment generation and poverty alleviation. Borno State — Integration and Progress Budget. Cross River State — People First Budget. DELTA STATE — A budget of hope and optimism. Ebonyi State — Innovation and Progress Budget. ED STATE — Home run and finish budget is strong. Ekiti State — Sustainable Growth and Development Budget.

Elsewhere, Enugu State – budget for destructive economic growth; Gombe State — Continuity and Integration Budget. Imo State — New economic growth budget. Jigawa State — Jigawa Metropolitan Area Budget. Kaduna State — Rural Transformation Budget for Inclusive Development. Kano State — Restoration and Transformation Budget. Katsina State — Building the Future; Kebbi State — Budget for Infrastructure Development and People Empowerment. Kogi State — Consolidation and Continuation Budget for Inclusive Growth. Kwara State — Economic Expansion and Collective Prosperity Budget.

Lagos State has also named its 2024 budget as the “Renewal Budget.” Nasarawa State — Budget for new initiatives. Niger State — Future Budget. Ogun State — Sustainable Growth and Development Budget. Ondo State — Economic Resilience Budget. Osun State — Reconstruction and Rehabilitation Budget. Oyo State — Economic Recovery Budget. Plateau State — A new beginning budget. Rivers State — New Hope Budget. Sokoto State — Hope and Resilience Budget. Taraba State — Upcoming Budget. Yobe State – Integration and Economic Recovery Budget and Zamfara State – Relief Budget.

For Chijoke Ekechukwu, former Executive Director of the Abuja Chamber of Commerce and Industry, this title is just rhetoric and the degree to which each government insists on achieving these tags will vary from state to state as well as the magnitude of their importance. pointed out that it was different. It's different for them too.

“In a normal budget situation, the budget figures for the various departments should reflect the names given to the budget. Mid-term and year-end reviews of budget performance should also produce a performance scorecard. This highlights how efficiently and effectively the budget was executed. Revenues and expenditures should reflect the unique opportunities of different states. State budgets are in fact divided into strategic business units. We need to model the private sector by doing things like n(SBU), so profitability and reducing unemployment and poverty should be priorities,” Ekechukwu said.

In a recent State of the State report, BudgeIT argued that if states want to improve budget execution, they need to increase their IGR and be more prudent with their spending.

The report stated that the cumulative revenue of the 36 states increased by 28.95 per cent from N5.12 trillion in 2021 to N6.6 trillion in 2022. He also noted that in total, his IGR for 36 states increased by 12.98 percent from 1 Nigeria. 0.61 trillion naira in 2021 and 1.82 trillion naira in 2022, demonstrating the strengthening of the country's revenue mobilization capacity.

Delta State Governor Sheriff Obolewori submits the 2024 budget to the State House of Assembly

However, the report states: “Nevertheless, the IGR to GDP ratio remains very low at 1.01%. The increase in IGR was not reflected overall, with 17 states experiencing a decline in IGR year-on-year; Nineteen states recorded positive growth. Cumulatively, each state's dependence on federal transfers increased from 58.4 percent in 2021 to 61.45 percent in 2022. Individually, 16 states At least 70 percent of total revenues consisted of transfers from the federal government, and 32 states were dependent on transfers. At least 50 percent of revenues are paid by the federal government. The viability of the state remains primarily dependent on taxes. Much depends on the ability to mobilize domestic revenue through

“Even though 15 states are yet to implement the N30,000 minimum wage, the cumulative labor costs in 36 states increased by 13.44% to N1.75 trillion from N1.54 trillion in the previous year. In 2021, overheads increased by 23.42 percent to N1.24 trillion in 2022.The combined debt of the 36 states rose from N6.37 trillion in 2021 to N7.25 trillion in 2022. and an increase of 13.89%.

“For example, the 2022 Benue State Budget was called the Economic Progress and Growth Budget, but at the end of the year, expenditure increased by 28.42 percent from 89.57 billion Naira in 2021 to 115.02 billion Naira in 2022. However, the largest portion of this increase was due to overhead costs.

“In 2022, Benue State’s overhead expenses increased by 13 billion naira (44.55 per cent) from the previous year to 42.18 billion naira, the highest in the Northern region and the 6th largest out of 36 states. Labor costs recorded an increase of 8.12 percent from N34.56 billion in 2021 to N37.37 billion in 2022.Interestingly, Benue City's operating costs in 2022 were more than six times the capital expenditures. “This was the worst recurrent expenditure, affecting capital expenditure across 36 states,” BudgIT said.

“Similarly, Kano State’s 2022 budget was named the Budget for Integration and Prosperity while the state’s IGR for the year went from N42.42 billion in 2017 to N42.51 billion in 2022. Only a modest increase of 0.21 per cent was achieved, with Pay As You Earn (PAYE) continuing to account for at least 80 per cent of tax revenue.

“Surprisingly, when Imo State presented its 2022 budget, it was named the Wealth Consolidation and Recovery Budget, but in the fourth quarter budget performance report, the same budget was named the Wealth Creation and Recovery Budget. 2 Budget, also known as the People's Budget.

Speaking further on Imo State’s budget, BudgeIT said, “One of the salient challenges facing Imo State is its over-reliance on Federal Government allocation for revenue. The state’s IGR for 2022 is: It decreased by 18.41 percent from 20.48 billion naira in 2021 to 16.71 billion naira in 2022, which is dependent on the federal government allocation of 88.25 billion naira, representing 84.08 percent of the state’s total revenue. Imo State's fiscal challenges are further accentuated by its expenditure priorities. The state maintains an expenditure priority that primarily prioritizes recurrent expenditure; 56.9 per cent or 114.13 billion naira in nominal terms) is earmarked for operational expenses.

However, it is noteworthy that despite being given a low priority of 43.08%, capital investment in Imo State grew by a staggering 116.0%, from 39.98 billion Naira in 2021 to 86.3 billion Naira in 2022. This has increased to 80 million naira. The increase from N6,299 in 2021 to N13.181 in 2022 strengthens the state’s ability to undertake critical infrastructure projects and development initiatives that have the potential to boost economic growth. However, it remains clear that Imo State needs to take deliberate revenue generation measures to improve its ability to meet mandatory payments and finance capital projects without resorting to annual borrowing. ”

The same scenario played out a few weeks ago when the governor presented his budget to the Legislature. It's even more colorful than the budget signature itself. Presenting budget proposals to lawmakers is typically a carnival-like event. And since the return to democracy, governors typically decide the annual budget.

Source: guardian.ng

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