Nigeria still Sluggish in Economic diversification drive amids Higher Crude Oil Price & Production…

    0
    749

    Analysts has express dissatisfaction on Nigeria’s executive arm of government, at all levels, sluggishness in diversifying countries revenue income from crude oil.

    Despite 43.40% increase in federally collected revenue on higher oil revenue reiterated the fact that Nigerian economy is still dependent on oil, which is not sustainable as a strategy for sustained revenue growth.

    Nigeria, sub-Saharan Africa’s largest energy producer, entered and exited its first recession in a quarter of a century under Buhari’s tenure as global oil prices plummeted and then gradually began to rebound.

    Meanwhile In the just concluded week, the National Bureau of Statistics (NBS), in its 2018 report tagged “Internally Generated Revenue At State Level”, revealed that Nigerian states’ internally generated revenue (IGR) – with the exception of Federal Capital Territory (FCT) – rose year on year (y-o-y) by 17.83% to N1.10 trillion in 2018, from N936.47 billion in FY 2017.

    Of the thirty-six states, thirty-two states grew their IGRs, especially six states which grew theirs by more than 50% in the year under review: Ondo (126.83%), Bauchi (121.79%), Imo (117.26%), Sokoto (108.03%), Niger (60.05%) and Akwa Ibom (51.73%) to N24.78 billion, N9.69 billion, N14.88 billion, N18.76 billion, N10.43 billion and N24.21 billion respectively.

    The increase in their IGRs were chiefly driven by higher revenues from income sources such as Pay As You Earn (PAYE) and Ministry, Departments and Agencies (MDAs). On the flip side, states such as Osun, Benue, Cross River and Abia recorded declines in IGR by 11.50% to N10.38 billion, 9.55% to N11.22 billion, 3.05% to N17.55 billion and 0.55% to N14.83 billion respectively in FY 2018.

    Further analysis of the report showed that only six states generated IGR above N40 billion: Lagos state generated the highest IGR of N382.18 billion, while Rivers, Ogun, FCT, Delta and Kano states generated N112.78 billion, N84.55 billion, N65.52 billion, N58.44 billion and N44.11 billion respectively.

    However, Yobe, Kebbi, Taraba, Ebonyi, Adamawa, Ekiti, Borno, Katsina, Gombe, Nassarawa, Zamfara and Jigawa generated the least IGRs; of N4.38 billion, N4.88 billion, N5.97 billion, N6.14 billion, N6.20 billion, N6.47 billion, N6.52 billion, N6.96 billion, N7.34 billion, N7.57 billion, N8.21 billion and N9.25 billion respectively – all below N10 billion.

    Meanwhile, total net Federation Accounts Allocation to states grew y-o-y by 43.40% to N2.49 trillion in FY 2018 from N1.74 trillion in FY 2017 amid increases in production and price of crude oil. According to the April edition of Opec’s Monthly Oil Market Report 2019, Nigeria’s average crude oil production increased y-o-y by 3.68% to 1.72 million barrels per day (mbpd) in 2018 from 1.66 mbpd in 2017.

    Also, Bonny Light’s average price per day rose to USD72.35 per barrel in 2018 from USD54.70 per barrel. Given the slower growth of 17.83% in states’ IGR to N1.10 trillion against the 43.40% in net Federal Accounts Allocation to N2.49 trillion, ‘dependency multiple’, FAAC to IGR, rose to 2.26 times in FY 2018 from 1.87 times in FY 2017.

    Amid y-o-y increases in IGR and net Federation Accounts Allocation to the states, the states’ average total debt to gross revenue improved to 1.38 times in FY 2018 from 1.68 times in FY 2017.

    The states’ total debt was N4.98 trillion in the year under review, comprising of N1.29 trillion external debt (using CBN official rate – N307.00) and N3.69 trillion domestic debt. Total external debt in US dollars was USD4.19 billion which largely constituted Lagos state debt of USD1.43 billion (33.97%) and Edo, Kaduna as well as Cross River states contributing USD0.28 billion (6.58%), USD0.23 billion (5.41%) and USD0.19 billion (4.50%) respectively.

    Total debt to gross income ratio of twelve states exceeded 150% at the end of FY 2018: Osun (537.41%), Cross River (414.46%), Ekiti (328.92%), Adamawa (214.81%), Bauchi (209.51%), Lagos (193.17%), Plateau (192.95%), Nasarawa (187.84%), Edo (175.86%), Imo (169.48%), Benue (164.29%), Kaduna (157.08%).

    However, States such as Yobe (63.24%), Jigawa (64.66%), Sokoto (69.17%), Katsina (72.77%), Ondo (82.30%) and Rivers (87.46%) recorded a lower than 100% total debt to gross income ratio.

    This site uses Akismet to reduce spam. Learn how your comment data is processed.