Analysis of Internally Generated Revenue and Its Implications on Fiscal Viability of State Governments in Nigeria

Abiola G. Asimiyu and Ehigiamusoe Uyi Kizito

Journal of Empirical Economics, 2014, vol. 2, issue 4, 216-228

Abstract: The paper examines the growth rate of state governments Internally Generated Revenue (IGR) in Nigeria between 1999 and 2011. It also compares the growth rate of IGR in urban and rural states as well as investigates the ability of IGR to finance state governments’ expenditures. Using descriptive approach, the results of the paper revealed that on the overall, the growth rate of state governments IGR was 20.1 per cent which is very low, and this growth rate of IGR is higher in rural states than in urban states. It was also discovered that the growth rate of State governments’ recurrent and total expenditures were 30.0 per cent and 34.2 per cent, respectively, and these growth rates are higher than the growth rate of IGR. It was further discovered that the IGR of urban states financed a greater proportion of their recurrent and total expenditures than the IGR of rural states. A direct relationship was found to exist between the growth rates of IGR and capital expenditures and, it was therefore recommended that more revenue should be given to rural states to finance capital projects to enable them grow their IGR, so as to promote economic development.

Keywords: Internally Generated Revenue (IGR); Expenditures; Urban states; Rural states; Federation Account. (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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