The outbreak of COVID-19 and its negative effect on the health and economic sectors has forced down the revenue curve of most states of the federation.
Like Nigeria and its sub-nationals, some emerging and frontier market economies are facing refinancing risks, just as market access has dried up for some.
LEADERSHIP findings revealed that financial conditions are yet to ease around the country amidst aggravated vulnerabilities.
More states in Nigeria recorded massive drop in revenue generation in the first quarter of 2020, with some recording up to 30 per cent decline in revenue mobilisation in the first 3 to 4 months.
The negative growth in income for the Q1 2020 was obviously occasioned by the restriction of movements and lockdown of businesses across the country to curb spread of the coronavirus pandemic.
LEADERSHIP investigations revealed that over 60 per cent of the 36 states of the federation had a drop in total revenues during this period.
From North to South, the situation is the same, with only few states recording slight increase in revenue collection under the current COVID-19-induced economic downturn.
The International Monetary Fund (IMF) had projected that Nigeria was heading to a recession in 2020, its worst in three decades.
The IMF predicted that the nation’s economy will recede by -5.4% in 2020 in its recent economic outlook report.
Lagos State commissioner for Economic Planning and Budget, Sam Egube told our correspondent that the state‘s Internally Generated Revenue (IGR) would drop to between 21 per cent and 30 per cent, and that would result in shrinkage in the budget.
Lagos state recorded N398.73 billion IGR in the fourth quarter of 2020, making it the state with the highest IGR in the period.
To now restart the economy, Lagos is planning to optimise the state’s budget for investments in jobs and priority sectors through job creation, economic stabilisation and fiscal consolidation.
The situation appears worse in the neighbouring state of Oyo where revenue generation took an embarrassing nosedive.
Following the breakdown of the COVID-19 pandemic in Oyo State, the state government said its economic fortunes took a turn for the worse, causing it to be spending without getting returns to the state’s coffer.
The state government told our correspondent that about N375 million was realised as donations by the state government.
Rivers State which followed Lagos with N140.40billion in IGR in the Q4 2019 could not record a marginal increase in her revenues in Q1.
The reduction in the revenue accruing to the state has been blamed on the total lockdown of Port Harcourt City, Obio/Akpor local government area, as well as Bonny local government area and Onne community in Eleme local government area that hosts majority of the oil companies with over 50 per cent of the state revenues.
Also revenue collection in Kaduna State dropped to between 50 to 60 per cent of the budgeted revenue for the first quarter.
Chairman of the Kaduna Internal Revenue Services, Dr Zaid Abubakar, told our correspondent that the pandemic has affected revenue generation in the state for almost four months of the.
According to him, revenue generation had been dwarfed to a large extent before the easing of the lockdown in the state.
„In spite of the challenges we have done pretty well by maintaining 50-60 percent collections during the lockdown. Although we are not where we should be but we are doing our best to provide the state with the needed revenue to provide governance for the state,” he noted.
However, the situation is slightly positive in some states like Imo and Borno States.
For instance, Imo State said it generated the sum of N4.8billion, a figure higher than the N2,988billion it generated in the last quarter of 2019.
The pandemic and the statewide lockdown worsened economic output of some states with existing vulnerabilities like insecurity.
Borno State, for instance, recorded a total of N6.7bn in one year prior to the pandemic season in the country.
Amidst Boko Haram insurgency, the state government said it generated N6.7billion within the last one year from its internally generated revenue in Q1 2020.