Salaries: Action Governors Must Take to Increase IGR

FAAC

Report that 24 state governments in Nigeria cannot independently pay workers’ salaries in 2024 is a reminder they need to find more ingenious ways to increase their revenue.

Development Diaries reports that out of the 36 state governments, only 11 can pay the salaries of their workers without relying on funding from the federal government.

According to findings from a report by Punch, the only states with robust internally generated revenue (IGR) are Lagos, Kano, Anambra, Edo, Enugu, Imo, Kaduna, Kwara, Osun, Ogun, and Zamfara.

The situation underscores the need for states to address the underlying issues comprehensively.

This clearly shows that there is a significant disparity in economic development among the states, with many lacking diversified revenue streams or effective financial management structures.

What should be done?

States must begin to look towards diversifying their revenue sources into areas significant to the state. Investment in agriculture, tourism, manufacturing, technology, and other sectors with the potential for growth and profitability should be prioritised.

States can also look to strengthen tax administration systems to improve compliance and increase tax revenues.

More importantly, states must promote fiscal responsibility and accountability to ensure that public funds are used efficiently and transparently.

For instance, the action by the Kebbi State Governor, Nasir Idris Gwandu, who recently shared 24 luxurious vehicles among members of the Kebbi State House of Assembly, is uncalled for with the state being dependent on federal allocation.

This is where the implementation of measures to enhance budget transparency, strengthen financial management systems, and enforce accountability mechanisms to prevent corruption and misuse of funds comes in.

State governments can also implement policy reforms and institutional strengthening measures to create an enabling environment for revenue generation and economic development.

Development Diaries calls on state governors to work towards gradually reducing their dependence on federal funds and begin building a more sustainable and resilient fiscal foundation for the future of their various states.

Photo source: Nigeria Governors’ Forum

Facebook
Twitter
LinkedIn
WhatsApp

About the Author