Osinbajo offers recipe for boosting states’ IGR


The vice president, Prof. Yemi Osinbajo, has said that states in the country can increase their internally generated revenue by harnessing the entrepreneurial spirit of the people and exploring ways to boost agricultural development.

Osinbajo stated this in his keynote address at the 18th Meeting of the Joint Planning Board (JPB) and National Council on Development Planning (NCDP) held yesterday in Asaba, Delta State.

The vice president who anchored his address on the theme of the event ‘State fiscal sustainability and economic diversification in Nigeria’ urged states to “engage in careful and well-thought out strategic planning in order to articulate and implement priorities derived from strategic thinking and based on comparative advantages.”

He said the federal government’s diversification of the Nigerian economy from oil dependence was meant to ensure infrastructural and human capital development.

 “Our ultimate purpose is to create jobs and growth and as key economic managers in the context of Nigeria’s fiscal federalism, it is essential that we work collaboratively and in tandem.  I am optimistic that the deliberations of this Council will contribute to achieving these noble objectives, which will lead us closer to lifting the 100 million people that the President (Muhammadu Buhari) has promised that we will lift out of poverty in the next 10 years,” he said.

Making references to numerous interventions by the federal government to assist states, including payment of workers’ salaries and pensions, restructuring of commercial debts owed by states, and advancing credit from the CBN and the Excess Crude Account, Osinbajo urged states to improve on the management of their limited resources, especially with the expected long-term decline in oil prices.

“I propose three things for the consideration of this august body as a means of increasing production and generating the revenues at state level.

First, I would urge that States engage in careful and well- thought out strategic planning in order to articulate and implement priorities derived from strategic thinking and based on comparative advantages.

“Second there is great scope for boosting agricultural production if States choose two to three high value crops/products to specialize in. Such specialization will enable economies of scale in the provision of support across the entire value chain of prepared land, seeds, fertilizers and pesticides, storage, processing and transportation, marketing and sales. This also implies organizing the agro-allied value chain from farm to table.

“In a similar vein, states must take advantage of the entrepreneurial spirit of Nigerians by empowering economic clusters and trade groups through the provision of basic infrastructure and shared facilities.”

He said the federal government would continue to create an environment for small businesses to thrive, as seen through its many micro, small, and medium enterprises (MSMEs) clinics nationwide and providing solar power to boost trade activities in economic clusters such as the ones in Ariaria market in Aba, Sabon Gari market in Kano, and Sura market in Lagos.

“The current move of the federal government to provide broadband connectivity for all by 2023 will assist the States productive base but they cannot charge fees for laying of broadband infrastructure, which is like strangling the goose that will lay the golden eggs,” he said.

He added that states could contribute to creating an environment for small businesses to thrive if it looks into the issues of multiple taxation and levies.

“The complaint of many small businesses is the multiplicity of levies and charges by state and local government agencies. States should in fact invest in agencies that can help small businesses comply with regulations and standards and to access credit. When the businesses grow and employ more they create taxable profit and taxable employees.

“The key thing is to think out of the box and utilize the opportunities that are open to the State. Some would have advantages that can be readily used in the area of tourism, others would be contiguous to major economic centres like Lagos and Abuja which offer markets as well as cheaper and more affordable land for residential and industrial purposes.”

“To start with, there should be greater collaboration with the Federal Inland Revenue Service to share data and also ensure remittance of VAT proceeds to it.

“Improving tax morale is also a very big part of the story as the evidence shows that people do not feel obliged to pay taxes and they justify this belief by asserting that they do not receive commensurate services.

“It would also be necessary for States to improve tax administration and widen the tax net by making it easier for people to pay tax both in terms of easier processes and lower levels of taxation,” he noted.

Similarly, the vice president urged states to take advantage of federal government programmes, as well as support from development partners to complement their efforts and ease some of their constraints.

“Some examples include the resources and support available from the Universal Basic Education programme, the National Social Investment Programme, the National Livestock Transformation Programme, the Anchor Borrowers Programme, the Family Homes Fund and the Basic Health Care Provision Fund amongst others. Moreover, where support is coming from development partners it should also be leveraged to support fiscal sustainability at State level,” he said.

Osinbajo also encouraged states to build skills needed to attract foreign and domestic investments, stating that the “Science, Technology, Engineering and Mathematics (STEM) education, functional digital literacy education from early childhood are the crucial building blocks for reaping the fruits of the knowledge economy that is now upon us.”


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