Despite huge federal allocation, Bayelsa among list of insolvent states

The Annual State Viability Index (ASVI) ranked Bayelsa — one of Nigeria’s oil-producing states — as an insolvent state, despite the huge federal allocation the state received in 2020.

The report conducted by Economic Confidential measured the viability index of states using each state’s internally generated revenue (IGR) as a percentage of its federal accounts allocation (FAA) for the year.

States with IGR of less than 10 percent of their total receipts from the federal allocations are considered insolvent. 

The report said that Jigawa, Katsina, Adamawa, Yobe, Niger, Taraba and Benue are among states that can not survive without federal allocation.

The report shows that Bayelsa state got a total of N152.54 billion as FAA in 2020 — but could only generate N12.18 billion as IGR, representing 8.0 percent of its total receipts from the federal account. 

What this simply means is that Bayelsa with its oil-production advantage is invisible as it can not survive without the federal allocation.

States with poor IGRs as a percentage of its FAA are Jigawa state with IGR of N8.6 billion compared to FAA of N107 billion, representing 8.1 percent of total receipt; Katsina, N11.3 billion compared to FAA of N130 billion, representing 8.8 percent of total receipt and Adamawa with IGR of N8.3 billion compared to N91 billion of FAA representing 9.1 percent of the total receipt.

Others include Yobe state, IGR of N7.7 billion compared to N84 billion of FAA representing 9.2; Niger with IGR of N10.5 billion compared to N109 billion of FAA representing 9.6 percent, Taraba with IGR of N8.1 billion compared to N82 billion of FAA representing 9.8 percent and Benue with IGR of N10.46 billion compared to N106 billion of FAA representing 9.8 percent in 2020.

Top on the list of states that can confidently survival without any federal allocation is Lagos state, with a total revenue generation of N418 billion compared to FAA of N299 billion which translate to 139 percent in 2020.

Also on the list is Rivers State which generated IGR of N117 billion compared to its FAA of N198 billion representing 58 percent; Ogun with N50 billion compared to FAA of N88 billion representing 57 percent; Kaduna State with N50 billion compared to FAA of N124 billion representing 40 percent; Oyo with IGR of N38 billion compared to FAA of N127 billion representing 29.7 percent and Anambra generated N28 billion compared to FAA of N94 billion representing 29.6 percent.

Last year, the Bayelsa state government blamed the insolvency status of the state on the bogus federating structure in the country.

It called for restructuring to address the current federating structure that denied states revenue from their resources.