A document obtained from the Nigeria Bureau of Statistics (NBS) shows that Abia State Internally Generated Revenue (IGR) for Q1 (January – March) and Q2 (April – June) 2019 was meagre N7,912,596,332.05 billion (N7.9 billion).
That is a monthly average of N1.3 billion for a state that has the potential of generating N5 billion monthly.
IGR are funds generated monthly from MDAs revenues, Direct Assessment, Pay-As-You-Earn (PAYE), Road Taxes and Other Taxes. Therefore, a revenue of N7.9 billion in the Q1 and Q2 of 2019 is a sign of loophole in IGR collection.
See the breakdown below:
• MDAs Revenue (Revenues generated administratively by State MDAs during the course of providing various services to residents in the State) =N3,087,027,761.28 billion (N3.087 billion)
• Direct Assessment (A form of personal income tax used to assess tax for self-employed individuals. It also relates to those imposed on businesses especially (informal) by the state authorities based on the size of their activities.) = N177,303,831.36 million (N177.3 million)
• PAYE (Pay-As-You-Earn, a form of personal income tax that refers to tax deducted directly from the wages and salaries of employees operating in the formal sector) = N3,787,591,787.11billion (N3.7 billion)
• Road Taxes (daily levies paid by commercial transporters operating within the state.) = N130,613,394.51 million (N130.6 million)
• Other Taxes (Various taxes Such as levies on market traders, land registration and other land related fees, development levies on individuals, pool betting/lottery/gaming fees, stamp duties on individuals etc.) = N730,059,557.79 million (N730.05 million)
Total IGR (Tax+MDA revenue) = N7,912,596,332.05 billion (N7.9 billion)
This figure (N7.9bn) represents a growth of 13.41 per cent in Abia State IGR when compared to N6.9 billion generated in the H1 (First Half) of 2018 but shows a drop to 0.70 per cent when compared to the N7.8 billion generated in the H2 (Second Half, July – Dec) of 2018.
Unlike other states its IGR increased in the past seven years, Abia’s has remained stagnant and unstable. Surprisingly, N16.7bn it declared in 2012 was the highest IGR the state has generated in the past seven years.
The highest under Ikpeazu’s government was N14.9 billion generated in the 2017 fiscal year. It, however, reduced to N14.8 billion in 2018 instead of improving. It previously crashed to N12.3 billion in 2014 from the N16.7 billion generated in 2012. It slightly increased to N13.3 billion in 2015 but reduced to N12.6 billion in 2016.
The 2019 (Jan-June) figure of N7.9 billion quoted by Abia government shows there’s no hope of having improved IGR this year to provide for the burdensome domestic and external loan of N67.017 billion and $98.582 million hanging on Abia’s neck as at June 2019.
In other words, Abia State generated a total net sum of N33.522 billion (N25.6 billion in FAAC and N7.9 billion in IGR.) excluding the N15.81bn 17 LGAs FAAC allocation) in the Q1-Q2 of 2019. It portrays excessive financial danger for the State because it wouldn’t repay comfortably the debts accumulated within the same period.
Analysis of IGR breakdown
The breakdown above shows that, in six months, (Q1 –Q2 of 2019) the sum of N3.087 billion was generated from Ministries, Departments and Agencies (MDAs). That’s an average of N513 million monthly. Abia State has about 36 Agencies/Parastatals,27 ministries and seven Departments/Commissions. How come these 70 MDAs return only N513 million monthly; fund ABSU alone is capable of generating?
Abia State generated from the Direct Assessment Tax, the sum of N177.3 million in six months. That is a monthly average of N29.5 million. How is this possible when Abia State has 1,765,008 million (male 958,186 and female 806,822) informal workers according to the NBS July 2010 bulletin?
Abia State government would generate the sum of N1,765,008,000 billion (N1.7 billion) taxing each informal worker N1,000 monthly, but they paid above N1,000. However, the government claimed, it generated the meagre sum of N29.5 million per month. No wonder some individuals in government became billionaires in just four-years.
Abia State government also quoted the sum of N3,787,591,787.11billion (N3.7 billion) as money generated from PAYE for six months. That’s a meagre monthly sum of N616.6 million for a state that has 65,000 civil servants and thousands of appointees.
Another area that caught our attention is the Road Taxes, where government quoted the sum of N130,613,394.51 million (N130.6 million) as revenue generated for six months. It represents just N21.7million monthly. How did they arrive at this figure when several reports have shown that Abia has about 200,000 Bus/cab and Keke/motorcycle? The commercial operators purchase about five annual emblems: ASEPA, LG, Ministry of Transport, ASATOA and ASPIM as well as daily tickets.
Other Taxes produced the sum of N730.05 million in six months. Aside from open shops and others in residential building, how many lockup shops do we have in Abia State’s markets? Lockup Shop owners pay N2,000 for infrastructure and N1,800 to local governments monthly. There are other levies on market traders, land registration and development, pool betting/lottery/gaming fees and stamp duties.
This mismanagement of IGR has left Abia State in distant 22 position in ranking behind states like, Ondo, N19.001bn, Cross River, N16.7bn, Kwara N16.09bn, Edo N15.4bn, Oyo, N14.06bn, Benue, N12.1bn, Sokoto, N12.07bn, Enugu, N10.69bn, Imo, N10.5bn, Osun, N10.2bn, Plateau, N9.1bn and Bauchi, N8.2bn.
States like Lagos, N205.1bn, Rivers, N75.9bn, Delta, N36.3bn, Ogun, N29.5bn, Kaduna, N22.4bn and Akwa Ibom, N20.4bn are top IGR generators. If managed efficiently, states like Delta, Kaduna and Akwa Ibom would not have better IGR return than Abia.
Ironically, Anambra and Ebonyi states in 25th and 28th positions with the IGR of N6.07bn and N5.1bn respectively are far developed in infrastructure than Abia State with higher IGR.