BudgiT, a civic technology organisation advocating for transparency and accountability in the public sector, on Thursday launched the 2022 edition of the state of states report.
The annual report that began six years ago, accesses and ranks all the 36 states long- term fiscal sustainability from most sustainable to least sustainable.
Again, like 2020 and 2021, Rivers state maintained its first position in the overall fiscal performance ranking and scores. Kaduna came second. Other states among the top five are, Lagos, Cross-River and Ebonyi.
Commendably, the two states of Kaduna and Cross-River made it to the top five in 2022.
The 2022 edition of the annual report is titled: Subnational Governance Reforms for a New Era.
Benue state ranked 36th position on the performance ranking table, other states at the bottom of the table are, Bayelsa, Yobe, Adamawa and Taraba.
Sadly, among the bottom five, Yobe state was the new comer having fallen 13 places from 21st in 2021 to the 34th position in 2022.
All the 36 states were ranked using five metrics; Index A looks at the ability of states to meet their operating expenses (Recurrent Expenditure) with only their Internally Generated Revenue.
Benue State governor, Samuel Ortom
Index A1 examines the percentage on year on year growth of Internally Generated Revenue. Index B reviews the states ability to cover all operating expenses and loan repayment obligations with their Total Revenue (Internally Generated Revenue + Statutory Transfers + Aids and Grants) without resorting to borrowing.
Index C analyses the debt sustainability of the states using four major indicators. A. Debt as a % of GDP, B. Debt as a % of Revenue, C. Debt service as a % of Revenue, D. Personnel cost as a % of Revenue.
Index D evaluates the degree to which each state is prioritizing capital expenditure with respect to their operating expenses (Recurrent Expenditure).
Country Director, BudgiT, Gabriel Okeowo said, since the BudgiT started this report six years ago, the fiscal performance of states in the country has not improved to an appreciable level.
He expressed optimism that 2022 edition of the fiscal performance report will spur state governors to sit up and ensure that the level of performance in their various states improve drastically.
“We hope that this report and the conversation we are going to have here today will help us to further urge the subnational governor to sit up, harness the natural resources in their domain, block loopholes of fraud and corruption and take advantage of several programmes that are designed to help states boost subnational economy.
“The Nigerian Governors Forum has said they are going to take interest in this report and ensure that it lands on the desk of all the governors of the 36 states in Nigeria.
“We can also not shy away from the fact that the revenue is also shrinking both from the federal level and state level. This calls for state government to look beyond federal transfer, revenue from oil and to begin to look at natural resources that are in abundance in all the states in Nigeria and see how they can harness that, how they can improve the tax nets at the state level to be able to improve revenue and to contribute significantly to the development of sectors that impact on human capital in the states,” he said.
Head of Research and Policy Advisory, BudgiT, Iniobong Usen stressed that the quality of expenditure for states needs to be scrutinised.
He said “For some states that priotise capital investment in religious institutions against schools, primary healthcare centres, those type of investment needs to be properly scrutinised.
“Citizens need to get value for money especially in critical social sectors of the economy, like health, education, water sanitation and hygiene.
Speaking on how low performing states can improve, Usen said;
“Rivers in comparison with other oil producing states like Akwa-Ibom and Delta have been able to mobilize revenues internally, they are second to Lagos states and this is something that other states may need to do. Carry out very critical tax reforms by broadening the tax space and blocking leakages by digitising their tax collection system”.
On her part, Prof Antonia Taiye Simbine, Director General, Nigerian Institute of Social and Economic Research (NISER), advised state governments that when reforms are put to use, the people of the state should be aware of the impacts, as this will make them embrace additional reforms.
