States must boost IGR, says Sanwo-Olu

Oziegbe Okoeki

LAGOS State Governor Babajide Sanwo-Olu said on Monday that states must adopt creative and innovative strategies to boost Internally Generated Revenue (IGR), to reduce dependence on what comes from the federation account on a monthly basis.

The governor spoke at the opening of the Federation Accounts Allocation Committee Retreat held at Eko Hotels and Suites, Victoria Island.

He said states must do everything within their power “to create and boost new sources of export, especially along the lines of value-added agriculture and manufacturing. We have everything we need to make this happen; we have the land, we have the people, we have the energy and the can-do spirit.”

Sanwo-Olu said Lagos is showing the rest of Nigeria the way regarding this, as the bulk of its annual budgets are funded by its creative approach to internal revenue generation.

He called for a new, fair and just federal revenue-sharing formula, saying: “The necessity of this cannot be swept under the table. There is actually a correlation between an appropriate revenue formula and the ability of the federating units to achieve a meaningful diversification and sustainable growth in IGR.”

Sanwo-Olu noted that Lagos should be considered for a special status recognition in the allocation of federation revenue.

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“As a former federal capital, the nation’s commercial and industrial nerve centre, and also Nigeria’s most populous state, Lagos shoulders a heavy burden, which if not properly discharged, poses great danger to the attainment of our national economic growth aspirations.

“It is projected that by 2050, Lagos will be the fifth or sixth most populated city in the world. Available statistics estimate that as many as half a million people currently migrate to Lagos from other parts of Nigeria, annually.

“The implications of this are clear – and we can see it in the mounting pressure on public facilities and utilities in the state: transport, energy, water, and so on. We are now in a race against time to not only catch up, but also hopefully create capacity that exceeds the demand in all of these areas.

“But we need all of the support we can get on this. The imperative to start planning and building for the distant future cannot be over-emphasised,” he said.

The governor advised that two things should be considered to make revenue sharing formula fairer, equitable and more development-oriented.

He said: “First is the need to attach increased value to population density as a critical factor, in addition to the nominal population figure. The population density of Lagos, measured as number of persons per square kilometre, is more than 20 times the national average. This is not surprising, considering that our state actually has the distinction of hosting the largest population on the smallest land mass.”