State of States T h e 2 0 17 E d i t i o n

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EXECUTIVE SUMMARY

Many state governments are confronted by rapidly between January and July 2017 but IGR continued to rising budget deficits as they struggle to pay salaries trail, reflecting huge problems with tax collection and meet contractual obligations and overheads due efficiency at state level when compared with the to a dip in oil price from its peak price of about $140 Federal Inland Revenue Service (FIRS). It is evident in per barrel to about $56 per barrel. our analysis that many states lack the formal structures that pay VAT. Thirty out of 36 states get an Over the last few months, state governments have average of 700-900m monthly, despite huge been devising policy changes with strong focus on differential in population. improving internally generated revenue and reining in expenditure. With this unfavourable outcome, the Gross Statutory Allocation Federal Government has requested sharp haircuts, reforms and a high degree of transparency — Lagos State statutory allocation after deductions including the publishing of budget proposals, the averaged N491 million per month in the first six enacted budget, budget implementation reports, audit months of 2017, reflecting increased pressure on the reports, and quarterly and annual reports for state- state’s share of federation revenue — a fallout of rapid owned enterprises — as a precondition for further accumulation of debts and associated obligations. support. However, this has not been adhered to with the required tenacity. Bonds issued by the states are usually assisted by Irrevocable Standing Payment Orders (ISPOs), which Internally Generated Revenue legally empower the Accountant General of the Federation (AGF) to withdraw sums due to debt State governments and state-controlled entities (local holders from state governments’ revenue accounts governments) collect and control ALL revenues with the federal government, including interest and generated from personal income tax, property tax, capital repayments. As about 83% of states’ road tax, radio and television tax among others. In revenues are collected by the Federal Government, 2016, Lagos State accounted for approximately 37% what accrues to states’ coffers is the balance left of total internally generated revenue collected by after obligations to debtholders are deducted from states. Lagos, Ogun and Rivers states lead in terms each state’s share of revenue. of Internally Generated Revenue uptake per capita. Collection efficiency in Kano is abysmal; despite its The effect of huge debt supported by ISPOs is huge market size, it could only collect N2,367 per already eating deep into the account of Lagos, Cross head, which is approximately 9.8% of Lagos collection River and Osun states. Osun’s net allocation is even in per head. the negative terrain, which invariably puts more pressure on future revenue. The monthly net On average, IGR uptake at state is N3,395 per head allocation of oil-producing states Akwa Ibom, Rivers, across the states; it is only in 10 states that collection Bayelsa and Delta average N10.69bn, N7.64bn. efficiency is higher than the statewide average. The N7.21bn and N6.22bn respectively. least performing states include Borno, Jigawa, Kebbi and Katsina. It is important for state governments to Debt Stock design innovative policies around tax collection, especially around collection efficiency. State governments are indebted to Nigeria’s banks and investors, shackled by huge repayment debts Value Added Tax borrowed against higher oil prices. Presently, the intersecting consequences of lending between Due to its market size, Lagos State tops in terms of banks and governments remain a pressing concern. VAT revenue in the first six months of 2017. Lagos The first indicators came when at least two-thirds of VAT revenue receipts between January and July 2017 Nigeria’s 36 governors demanded a federal averaged N6.38bn monthly, significantly higher than government relief package, due to the inability of Kano’s. Ekiti, Ebonyi, Bayelsa and Nassarawa trail the many states to pay salaries and pension benefits of pack. Oyo’s monthly VAT averaged N1.3bn monthly civil servants for months — even more than a year in some cases.

State of State 01 Total debt stock of Nigerian states has increased reflecting the low debt-to-revenue ratio of the state. significantly from the 2012 level of N1.79tn to N2.12tn in 2014. With increased inability to meet recurrent Osun trails the overall index. The state’s inability to expenditure obligations and increased pressure, most meet its recurrent expenditure obligations, its heavy states resort to more debt uptake. Total debt profile of debt profile and inefficiency in the collection of the states in 2015 and 2016 was N3.03tn and N3.89tn internally generated revenue weighed seriously on respectively. Lagos State’s total debt stock rose from the state. Kwara’s rapid improvement in its internally the 2014 level of N500.8bn to N734.7bn in 2016 — generated revenue helps the state’s performance on accounting for 24.2% of the total debt stock of state the index. Also noticeable is the 22.56%, 52.18%, governments. 2.29% and 2.78% fall in the debt profile of Delta, Kebbi, Gombe and Ebonyi states, respectively. Delta, Kebbi, Gombe and Ebonyi states’ total debt fell by 22.56%, 52.18%, 2.29% and 2.78% respectively, State governments, therefore, need to tremendously while that of Oyo and Yobe rose by 127.56% and embrace a high level of transparency and 126.03% respectively. Overall, the total debt profile of accountability, develop workable economic plans, states increased by 28.45%. Average growth rate of take haircuts — especially on overheads — expand states’ debt between 2012 and 2016 remains elevated their internally generated revenue (IGR) base, and cut at 22.16%, while average growth rate of internally down on debt accumulation without a concrete generated revenue is 9.04%. Clearly, the sustainable repayment plan. part for states is to rein in debt uptake and focus more on improving internally generated revenue. Opportunities

Fiscal Sustainability Index The state needs to look beyond rhetorics and commit to a reduction in its operating costs, including Rivers State tops the fiscal sustainability index due to significantly slashing its unreasonable overheads bill its strong revenue profile, powered by crude oil, its while freeing up more spending for social relatively improving internally generated revenue infrastructure. States will need to link future profile and a manageable recurrent expenditure borrowing to sustainable projects, which can pay profile. Rivers’ Debt profile stood at N157.2bn at the back the capital cost of its current loans and improve end of 2016. Lagos’ massive debt and expansive the overall income profile of the state. recurrent expenditure profile weighed down on its internally generated revenue performance. Ogun Economic planners will need to lift states from a state, despite running a recurrent budget deficit, is up perpetual cycle of borrowing, work to improve tax on the fiscal sustainability index due to the rapid collection efficiencies and realign budgeting with growth in its internally generated revenue. However, statewide plans. Significant investment is needed to Ogun’s debt profile is equally increasing, which could improve the overall economic performance at state weigh in on its performance in future. level, which invariably could create jobs that feed into states’ internally generated revenue. Improve The index looks at the ability of states to meet their spending is also critical for value-added tax revenue. recurrent expenditure obligations with their VAT Opportunities in aquaculture, agriculture, revenue, internally generated revenue and advantage manufacturing, trade, logistics and tourism abound income, including the 13% derivation. Equally across states but it seems states lack the rigour and important is states’ ability to meet their recurrent foresight to explore them. expenditure obligation with all revenue source — a test of prudent fiscal management. Kano, Katsina, Rivers and Lagos top that portion of the index. In effect, only four states could meet their recurrent expenditure obligation without resorting to borrowing or tapping Average growth rate of states’ debt between donor funds and other extra-budgetary revenue 2012 and 2016 remains elevated at 22.16%, sources. while average growth rate of internally generated revenue is 9.04%. Also, the index looks at the ability of states to sustainably manage their debt profiles. The Index tries to see the extent to which today’s revenue can service outstanding debts. Anambra and Yobe top the index,

State of State 02 THE STATES HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.12bn

N3.04bn 81,583 N2.84bn N2.87bn N2.83bn 70 110 3.3% N2.54bn N2.59bn (1000 birth) (1000 birth) Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Abia State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N53.5bn 2012 N16.8bn 2012 N14.3bn 2013 N61.1bn 2013 N12.5bn 2013 N37.2bn 2014 N54.9bn 2014 N12.4bn 2014 N31.2bn 2015 N40.1bn 2015 N13.4bn 2015 N41.7bn 2016 N30.7bn 2016 N12.7bn 2016 N66.2bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 24.7% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cassava Rice 304,257.7 tons 75.3% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.95bn N768.8m N253.2m N1.06bn*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N4.03bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.35bn* RECURRENT EXPENDITURE AVERAGE MONTHLY PERSONNEL (JAN-JUN 2017) COST (JAN-JUN 2017) N53.5bn Domestic N2.44bn* Debt N4.78bn* AVERAGE MONTHLY OVERHEAD COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.78bn* $41.3m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N4.03bn* (JAN - JUN 2017) (2016) Shortfall -N0.75bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 0 4 OPPORTUNITIES Sustainability Rank Ease of Doing 9 Business 41 Days

Oil Palm River Port Footwear Starting a ABIA STATE Business

Abia appears to be increasingly relying on indices that ease commerce, including the cost investments in agriculture to flatten out the and minimum capital to open a new business; negative effect of low crude oil prices, which obtaining electricity connections; constructing currently account for approximately 68% of new warehouses and obtaining credit. government revenue. With an annual wage bill estimated at N28.15bn, Abia hopes to pool The Textile, Apparel and Footwear sub-sector about N21.95bn as internally generated of the Nigerian economy is presently estimated revenue (IGR) in 2017. at N2.02tn, and is expected to grow rapidly on the back of improving discretionary spending. The State’s IGR in 2016 was estimated at The Aba Industrial Zone could leverage on the N12.69bn, down from 2015 levels of N13.34bn. availability of cow leather in the North; With the vast majority of its workforce petrochemicals in the South; its unique employed in the informal sector, Abia may need location and human capital, to become a net to find other ways to expand her undulating exporter of footwear. With worldwide trade in takings from tax. For instance, despite shoes expected to top $371.8bn by 2020, collecting N16.75bn as IGR in 2012, IGR fell to Nigeria and Abia have an advantage; they N12.5bn and N12.3bn in 2013 and 2014 could overtake Vietnam, which presently respectively. exports approximately $13bn worth of goods to the United States and Europe. If business Abia has begun to take charge, focusing on activities are tangibly formalised in Abia, Aba optimising proceeds from its oil palm and could – with strategic planning, improved cassava sub-sectors. Recently, approximately production process and aggressive marketing 3,058 hectares of land at the Ohambele Oil strategies - become a major player in the near Palm Estate was cultivated, with moves made future. to recover the government’s Oil Palm Estates at Erei in Okon Aku, Ohafia LGA and Ozuitem in The State and Federal government will also Bende LGA. Abia hopes to become the largest have to see to the 300-hectare industrial park supplier of exotic palm seedlings in Nigeria, in Osisioma, which when completed, should with a stock of over seven million seedlings by have 68,692 units of industrial workshops and 2019; over 10,000 hectares have been dedicated warehouses needed for substantial to cassava cropping, amid plans to acquire industrialisation. heavy agricultural equipment to drive productivity and expand output. Abia State will also have to negotiate trade deals that move its tourism potentials to reality, One way in which Abia can extend these starting with the Azumini Blue River, which measures to its Manufacturing sector, which is could become a major attraction for Nigerians concentrated around Aba, is to dredge the and foreigners if the requisite funding is Obuaku river and kickstart the Obuaku River invested. Port Complex onstream. These projects should connect Abia directly to the Atlantic Ocean, potentially reducing the costs of moving industrial feedstock, thereby transforming the Aba Industrial Zone. Infrastructure within the region will also need to be improve, alongside

State of State 05 HEALTH INDICATORS

N4.12bn NET FAAC ALLOCATION 2017

N2.83bn N2.81bn N2.81bn 75,285 37 52 1.9% N2.51bn N2.50bn (1000 birth) (1000 birth) N2.45bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Adamawa State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N51.5bn 2012 N4.6bn 2012 N29.0bn 2013 N57.8bn 2013 N4.2bn 2013 N20.9bn 2014 N50.9bn 2014 N4.9bn 2014 N34.9bn 2015 N37.8bn 2015 N4.5bn 2015 N56.9bn 2016 N29.8bn 2016 N5.8bn* 2016 N87.8bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 14.4% Structure of State’s Revenue 2017 NET FAAC

Maize Cassava Millet 61,055.02tons (2015) 85.6%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.06bn N803.8m N/A N482.4M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.34bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.13bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N62.1bn (JAN-JUN 2017) Domestic N2.88bn* Debt AVERAGE MONTHLY OVERHEAD N5.00bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N5.00bn* $83.7m MONTHLY RECURRENT External Debt EXPENDITURE Total average monthly revenue COMMITMENTS N3.34bn* (2016) (JAN - JUN 2017) Shortfall -N1.66bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 0 6 OPPORTUNITIES Sustainability Rank Ease of Doing 27 Business 44 Days

Livestock Sugarcane Hydro-Electricity Starting a ADAMAWA STATE Business

Adamawa is renowned for the cultivation of power plant generating between 35MW to cotton, groundnuts, maize, yam, guinea corn, 50MW. Adding investments in drip irrigation millet and rice. This largely agrarian economy system and other renewable energies, Kiri accounts for most jobs, but remains operating could simultaneously irrigate close to 500,000 at sub-optimal levels, contributing to chequered hectares of land. There is also Adamawa’s IGR levels. As at year-end 2016, Adamawa’s IGR savanna sugarcane plantation, which sits on stood at N5.78bn, up from 2015 levels of N4.4bn. approximately 36,000 hectares, and presently In 2013 and 2014, IGR was N4.15bn and N4.62bn employs approximately 5,000 workers. respectively. In this regard, Adamawa must seek to prioritise The State’s monthly recurrent expenditure is research on crop management approach in its down from 2016 estimates of N5.78bn, to sugarcane fields, which could take yields of the N5.01bn for 2017. Monthly IGR averaged crop beyond 100 tonnes per hectare. N482mn through 2016, while average monthly Sugarcane Tops (SCT), a major byproduct of revenue from FAAC, including Value Added sugarcane, is increasingly a major source of Tax, came to an average of N2.65bn between feed for cattle. As about 21 tons of SCT January and June 2017. produced per hectare is sufficient to feed a cow for a year, Adamawa can immediately Given that Adamawa’s monthly revenue is not leverage on this resource, to expand its expected to be significantly above N3.28bn, livestock size and transform its profile into one while its monthly Recurrent Expenditure of a net exporter of meat and meat products. projection, as defined in the 2017 budget stands We advise the adoption of a agriculture at N5.01bn, the State may have to draw in more marketing board first, to make it easier for the debt to fund its obligations; a situation that bulk purchase of associated produces and could further worsen its fiscal exposure. commodities. This will be augmented with the development of a transportation plan around Consequently, Adamawa’s Domestic debt the logistics needs of the agriculture sector. profile may already entering uncharted territory—now standing at N62.15bn as at the Nigeria’s Ministry of Agriculture estimates end of 2016; up from 2014 levels of N26.44bn. Its there are 19.5 million cattle in Nigeria; external debt is also growing in tandem; as at Adamawa could potentially generate up to December 2016, Adamawa was indebted to the N30bn and add over five million more, if it tune of $83.7mn, compared to External debts incentivizes its 30 grazing reserves as well as worth $46.78mn, as at year-end 2014. improves herd size and quality.

To attain financial viability, the State may need Down the value chain, investments into to evaluate the workings of its Tax collection feedlots, modern abattoirs and a central systems; majority of Adamawa’s population marketplace for the associated raw materials work in the informal sector and therefore, will ensure Adamawa substantially positions innovative ways to capture them into the Tax itself as a net supplier and exporter of milk, net is non-negotiable. meat and leather into the global commodities markets. The Kiri dam, which was completed in 1982, still has the potential to become a hydroelectric

State of State 07 HEALTH INDICATORS NET FAAC ALLOCATION 2017 N13.08bn N13.61bn N12.67bn N11.97bn N11.09bn N9.12bn N9.31bn 245,489 52 78 6.5% (1000 birth) (1000 birth) Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Akwa Ibom State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N254.2bn 2012 N13.5bn 2012 N118.3bn 2013 N294.7bn 2013 N15.4bn 2013 N134.9bn 2014 N258.3bn 2014 N15.7bn 2014 N92.4bn 2015 N163.9bn 2015 N14.8bn 2015 N157.9bn 2016 N104.4bn 2016 N23.3bn 2016 N170.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 29.74% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Timber Banana 90,691.00tons 70.26% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n3.97bn N861.2M N6.7bn N1.94bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N13.49bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N4.22bn* RECURRENT EXPENDITURE AVERAGE MONTHLY PERSONNEL (JAN-JUN 2017) COST (JAN-JUN 2017) N3.9bn Domestic N9.89bn* Debt AVERAGE MONTHLY OVERHEAD N14.11bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N14.11bn* $62.9m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue

(JAN - JUN 2017) N13.49bn* (2016) Shortfall -N0.62bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 0 8 OPPORTUNITIES Sustainability Rank Ease of Doing 5 Business 36 Days

Cocoa Sea Port Petro-Chemical Starting a AKWA-IBOM STATE Business

Akwa Ibom is Nigeria’s largest oil producing status alongside the Ibom Industrial Free State, churning approximately 504,000 Trade Zone will be a boost, in terms of barrels per day. This peculiar development is logistics for importation and export. This a likely contributor to the growth of its move could position Nigeria as a net internally generated revenue (IGR). As at the exporter of the petrochemicals that end of fiscal year 2016, IGR stood at constitute industrial feedstock for the N23.269bn, a significant rise from N14.791bn production of aspirin, carpeting, crayons, in 2015. However, IGR came to N15.398bn detergents, dyes, fertilizers, herbicides and and N15.676bn in 2013 and 2014 respectively. pesticides.

Akwa Ibom’s annual recurrent expenditure Elsewhere, Akwa Ibom is sitting atop 708,100 has moved from 2016 estimates of arable hectares, and already planning to N94.9638bn, to N169.295bn for 2017. Monthly expand cocoa cultivation to approximately IGR averaged N1.9bn through 2016, while 32,000 hectares within four years. We argue average monthly revenue from FAAC was that the State may need to expand land N11.5bn between January and June 2017. under cultivation beyond 100,000 hectares; given that yield is not expected to top 1ton In terms of financial obligations, the State’s per hectare. Domestic debt profile was N155.4bn as at the end of 2016, up from prior levels of N81.756bn Cocoa cropping should be complemented by in 2014, and is projected to increase investments in the energy and logistics that significantly. s h o r e u p t h e S t a t e ’ s c h o c o l a t e manufacturing potentials. Diversifying into Should Akwa Ibom seek to take up more palm and rubber cultivation/export will debt, its Overheads must undergo sharp cuts, translate to greater financial security, as land particularly as trends suggest that estimated under palm oil cultivation above 100,000 monthly revenue will not be significantly hectares could deliver over 50,000 jobs and higher than N14bn, a figure which is already 430,000 tons of crude palm oil (CPO) to the within the same threshold as the State’s local and national economy. monthly recurrent expenditure projections.

We advise Akwa Ibom to tap into its proximity to the Atlantic ocean and enlarge its earning power via a thriving aquaculture industry. Akwa Ibom is sitting atop 708,100 arable Nigeria’s fishing sub-sector is worth an hectares, and already planning to expand estimated N530bn, and a significant market cocoa cultivation to approximately 32,000 share is Akwa Ibom’s for the taking if hectares within four years. attention is paid to various aspects of the value chain, including seismic data acquisition, geotechnical engineering and aqua-processing services. Bringing the proposed Ibom Deep Sea Port to active

State of State 0 9 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 52,992 51 75 1.2% N4.45bn (1000 birth) (1000 birth) N3.24bn N2.74bn N3.13bn N2.83bn N3.10bn N2.83bn Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Anambra State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N54.5bn 2012 N7.6bn 2012 N18.5bn 2013 N58.9bn 2013 N8.7bn 2013 N7.9bn 2014 N52.2bn 2014 N10.5bn 2014 N11.0bn 2015 N40.4bn 2015 N14.8bn 2015 N15.6bn 2016 N32.7bn 2016 N16.2bn 2016 N23.3bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 29.74% Structure of State’s Revenue 2017 NET FAAC

Yam Cassava Rice 156,058.35tons 70.26% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n2.3bn N901.3M N/A N1.35bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N4.54bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N1.48bn* RECURRENT EXPENDITURE AVERAGE MONTHLY PERSONNEL COST (JAN-JUN 2017) (JAN-JUN 2017) N155.4bn Domestic N3.24bn* Debt AVERAGE MONTHLY OVERHEAD N4.72bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.72bn* $50.6m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS (JAN - JUN 2017) N4.54bn* (2016) Shortfall -N0.18bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 10 OPPORTUNITIES Sustainability Rank Ease of Doing 6 Business 34 Days

Clay River Port Poultry Starting a ANAMBRA STATE Business

The Anambra State government has, by its own Its proximity to the river Niger as a whole can admission, taken a shrewd fiscal position form the backbone of a cheaper transportation during a boom in Crude oil prices. The State network for feedstock and other industrial raw seems to be positioning itself as a major rice materials; one strategy is Anambra could take production belt, recording 230,000 metric grains from Nigeria’s Middle-belt, process tonnes in 2016. Rice yield has improved these into animal feed and use its logistics significantly to 5.5 mt/hectare from 3.3 base to sell these products across the country. mt/hectare, mainly on the back of improved This network can also service the South-east’s seedlings. petroleum needs.

Anambra’s annual Recurrent Expenditure is With extensive deposits of clay, glass sand, projected at N56.6bn in 2017, a figure slightly kaolin, limestone, aggregates, bentonite and lower from 2016 estimates of about N60bn. aluminum, Anambra could position itself as a Internally generated revenue (IGR) in 2015 was major producers of tiles, particularly within the N14.8bn, and the State projects IGR worth Nigerian housing market, which is set to N20.4bn for 2017; an increase of 26% over 2016 expand by 20 million housing units in the next estimates. With monthly projected IGR pegged decade alone. Noteworthy moves include the at N1.3bn and average monthly FAAC revenue public-private partnership, which resulted in a coming to N2.97bn (based on figures from 75-hectare poultry farm with a capacity of two January to June 2017), Anambra could meet her million birds per annum, and should take the Recurrent Expenditure obligations, if she is State’s annual production numbers to five able to further rein in its Overheads, freeing million. Nevertheless, significant investments funds to invest in capital items within the in feed mills, silos and associated budget. infrastructure is needed, if Anambra expects to surpass a target beyond 20 million birds in the next ten years. Anambra houses Nigeria’s only indigenous automobile manufacturing plant and is also the We advise Anambra to consolidate its place in least-indebted State, with a Domestic Debt Nigeria’s rice production value-chain – by profile of approximately N3.99bn. Anambra is ramping up measures that anticipate and meet however planning a Domestic Borrowing the logistics needs of the sub-sector. uptake of N10bn in 2017, hinged on Federal government refunds from the Paris Club debt. The State likely hopes to also close any budget gaps with the N15bn worth of infrastructure it Guaranteed economic independence will provided on behalf of the Federal Government. come to Anambra, if the lower Niger can be fully dredged and the Onitsha port comes Guaranteed economic independence will come on-stream, serving the South-east and to Anambra, if the lower Niger can be fully North-east of Nigeria. dredged and the Onitsha port comes on- stream, serving the South-east and North-east of Nigeria.

State of State 11 HEALTH INDICATORS NET FAAC ALLOCATION 2017 N2.92bn N2.86bn N2.54bn N4.45bn N2.52bn N2.43bn N2.88bn 34,961 80 127 0.6% (1000 birth) (1000 birth) Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Bauchi State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N59.1bn 2012 N4.1bn 2012 N29.3bn 2013 N64.5bn 2013 N4.9bn 2013 N28.1bn 2014 N57.3bn 2014 N4.9bn 2014 N43.8bn 2015 N41.2bn 2015 N5.4bn 2015 N74.5bn 2016 N32.4bn 2016 N8.7bn 2016 N99.8bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 19.72% Structure of State’s Revenue 2017 NET FAAC

Sugar Cane Cassava Cowpea 92,390.29tons (2015) 80.28%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n2.03bn N918.0M N/A N723.1M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.67bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.34bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N69.9bn (JAN-JUN 2017) Domestic N2.56bn* Debt AVERAGE MONTHLY OVERHEAD N4.90bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.90bn* $97.2m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N3.67bn* (JAN - JUN 2017) (2016) Shortfall -N1.24bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 12 OPPORTUNITIES Sustainability Rank Ease of Doing 20 Business 33 Days

Sugarcane Tourism Livestock Starting a BAUCHI STATE Business

Bauchi State’s significant economic plan is To further sweeten any economic deals in one of its most recent: a public-private the pipeline, Bauchi must rely on its Yankari partnership that aims to place 60,000 National Park to rake in revenue. As home to hectares of land under sugarcane cultivation. several natural warm water springs, as well The complement to this is a proposed sugar as a wide variety of flora and fauna, these milling plant and refinery that will transform renowned reserves of about 2,244 square industrial feedstock into 5,000 metric tons of kilometres will increase net spending from sugar per day, creating at least 5,000 direct Nigerians and foreign tourists, provided the and indirect employment opportunities Internet and other multimedia channels are immediately. used to professionally promote Yankari.

Internally generated revenue (IGR) came to N8.67bn as at the end of 2016; six times less than projected annual recurrent expenditure of N58.6bn for 2017.

The sugarcane fields are not the only place The sugarcane fields are not the only place where Bauchi will need to do some cutting – where Bauchi will need to do some cutting average FAAC revenue from January to June – average FAAC revenue from January to 2017 was only N2.7bn – two times below the June 2017 was only N2.7bn – two times N6.04bn projected in the 2017 budget; a below the N6.04bn projected in the 2017 situation that makes a case for leaner budget; a situation that makes a case for spending across the board. leaner spending across the board.

With its monthly Recurrent Expenditure commitments estimated at N4.83bn in 2017, while revenue projections are not expected to rise above N3.62bn, even if the State meets its IGR targets, the likelihood is its debt profile may witness a marked increase. Already, Bauchi’s Domestic debt profile stood at N69.99bn as at the end of 2016, from N57.7bn in 2015.

To raise its earning potential, Bauchi should follow through on the Kafin Zaki dam, a project that aims to put 120,000 hectares of arable land under irrigation. The project would also support the production of one million tons of sugarcane annually, with over one million jobs in agro-allied industries.

State of State 13 HEALTH INDICATORS NET FAAC ALLOCATION 2017

N8.98bn N8.35bn N8.87bn N7.98bn N7.41bn N7.33bn 30,858 80 128 2.7% N6.64bn (1000 birth) (1000 birth) Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Bayelsa State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N158.4bn 2012 N4.9bn 2012 / N226.8bn 2013 N187.9bn 2013 N10.5bn 2013 N74.1bn 2014 N150.9bn 2014 N10.9bn 2014 N97.9bn 2015 N88.3bn 2015 N8.7bn 2015 N110.8bn 2016 N58.1bn 2016 N7.9bn 2016 N172.1bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 4.93% Structure of State’s Revenue 2017 NET FAAC

Fish Cassava Rice N/A (2015) 95.1%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n7.21bn N728.4M 4.77BN N658.8M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated N13.37bn* (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N4.36bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N140.2bn (JAN-JUN 2017) Domestic N8.57bn* Debt AVERAGE MONTHLY OVERHEAD N12.93bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET $39.3m MONTHLY RECURRENT N12.93bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N8.60bn* (2016) Shortfall -N4.33bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 14 OPPORTUNITIES Sustainability Rank Ease of Doing 14 Business 35 Days

Aqua-Culture Sea Port Petro-Chemicals Starting a BAYELSA STATE Business

Bayelsa State has the unenviable position of waters to operate a bio-plastic powerhouse. hosting one of the largest crude oil and With the global market for bioplastics natural gas deposits in Nigeria, as well as expected to reach $30.8bn by 2020, Bayelsa some of its poorest people. could readily begin the journey to transforming its economy away from oil. Its annual Recurrent Expenditure is projected at N155.1bn in 2017, and average monthly Bayelsa may also develop its human FAAC revenue came to N7.8bn in the first six resources for deployment in mariculture, a months of 2017. We believe Bayelsa’s specialized branch of aqua-culture involving monthly revenue, based on our projections, the cultivation of marine organisms for food will likely not exceed N8.55bn, while and other products in the open ocean. To Recurrent Expenditure is projected at facilitate transport to markets, ongoing plans N12.9bn per month; this already shows a wide to develop export processing and free trade shortfall - excluding the additional costs of zones, as well as dredging Bayelsa’s inland Capital Expenditure, which is pegged at waterways are likely unavoidable. N88.1bn.

Pockets of news reports note the State’s employees are still being owed a backlog of 2016 salaries. In addition, the consistent 2017 payments exclude payments due to We advise that Bayelsa makes a departure pensioners (who are now being owed over a from relying overwhelmingly on its share year of arrears), and local government of oil derivation for its revenue. Surrounded workers, who have peculiar delayed salary by rivers and creeks, as well as numerous payment structures. solid minerals and agricultural products, diversifying into aquaculture, with a focus We advise that Bayelsa makes a departure on large-scale algae and fish farming from relying overwhelmingly on its share of oil should be a priority. derivation for its revenue. Surrounded by rivers and creeks, as well as numerous solid minerals and agricultural products, diversifying into aquaculture, with a focus on large-scale algae and fish farming should be a priority.

In particular, commercial and industrial algae cultivation form the basis for raw materials used in the production of omega-3 fatty acids, natural food colorants, fertilizers, bio- plastics and pharmaceuticals. Bayelsa could build algae ponds across its coastlines and leverage on its closeness to international

State of State 15 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 196,270 67 104 5.6% N4.44bn (1000 birth) (1000 birth) N2.97bn N2.96bn N2.97bn Infant Under 5 HIV N2.54bn N2.65bn N2.62bn Projected HIV Prevalence Population Mortality Mortality Rate 2014 2014 2014 2012

Benue State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N53.3bn 2012 N8.4bn 2012 N28.8bn 2013 N58.1bn 2013 N8.37bn 2013 N29.9bn 2014 N52.7bn 2014 N8.28bn 2014 N23.8bn 2015 N37.8bn 2015 N7.6bn 2015 N46.9bn 2016 N29.7bn 2016 N9.6bn 2016 N74.2bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 20.86% Structure of State’s Revenue 2017 NET FAAC

Fish Yam Citrus Fruits 1,760,202.40tons 79.14% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n2.14bn N881.6M N/A N769.4M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N3.82bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.80bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N63.5bn (JAN-JUN 2017) Domestic N2.73bn* Debt AVERAGE MONTHLY OVERHEAD N5.53bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N5.53bn* $34.7m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N3.82bn* (2016) Shortfall -N1.71bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 16 OPPORTUNITIES Sustainability Rank Ease of Doing 23 Business 36 Days

Fish Soya Beans Fruit Starting a BENUE STATE Concentrate Business

Majority of Benue’s working population do so up the State, easy movement of goods to directly and indirectly in the agricultural new markets can mean Benue builds a new sector; one that covers over three million manufacturing base around the river ports hectares of land, yet remains largely under- on the back of cheaper logistic costs and utilized. abundant agricultural products.

The State is proposing a Capital Expenditure Benue can also place some 500,000 spending of N97.56bn for fiscal year 2017, hectares under soybean cultivation, to make while its annual Recurrent Expenditure is optimal use of its climate and topography, estimated at N66.3bn in 2017; its average whilst tapping into national and regional receipts from FAAC for the first six months of market demand. A yield of at least four tons 2017 is N2.78bn. With IGR figures at N792mn per hectare of the crop could effectively per month (based on 2016), it could be nearly transform Benue into a major raw material impossible for Benue to meet its monthly hub for soybean oil, flour, animal and dairy Recurrent Expenditure projections of feed. N5.53bn, as contained in its 2017 budget. As Benue currently produces over 1,000,000 metric tons of citrus fruits per annum, she is A bright spot is that Benue’s wage bill for in pole position for a stake in the Fruit 2017 is estimated at N43.35bn, down from Concentrate Market, which is expected to 2016 estimates of N45.93bn. However, top $34.6 billion by 2019. A fruit concentrate Overhead costs are expected to be in the plant within the Makurdi Industrial Estate region of N23bn in 2017 – little change from with requisite infrastructure, as well as 2016 levels. expanding farmers’ capacity to grow more fruits, will serve Benue well in this regard. With its Domestic debt already at N63.5bn as at end-December 2016, Benue may have to reduce its overheads, particularly as the government is yet to meet salary obligations, owing up to five months of wages, in some Its farms are scattered across the State’s instances. To make financial progress, Benue vast landmass, making it difficult for produce to get to market at competitive will have to start with its greatest advantage; prices. An elaborate transportation agriculture and location. network plan to connect farm clusters to market is therefore non-negotiable. Its farms are scattered across the State’s vast landmass, making it difficult for produce to get to market at competitive prices. An elaborate transportation network plan to connect farm clusters to market is therefore non-negotiable.

Dredging the Benue River is one way to open

State of State 17 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 75,388 34 46 2.4% N5.14bn (1000 birth) (1000 birth) N3.55bn N3.50bn N3.51bn Projected HIV Infant Under 5 HIV N3.16bn N3.11bn Prevalence N3.04bn Population Mortality Mortality Rate 2014 2014 2014 2012

Borno State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N61.7bn 2012 N2.44bn 2012 N26.6bn 2013 N68.4bn 2013 N2.13bn 2013 N26.4bn 2014 N63.2bn 2014 N2.76bn 2014 N26.4bn 2015 N48.2bn 2015 N3.53bn 2015 N26.9bn 2016 N36.9bn 2016 N2.68bn 2016 N37.7bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 5.88% Structure of State’s Revenue 2017 NET FAAC

Beef Groundnut Onions 1,250.00tons (2015) 94.12%

IGR AVERAGE MONTHLY REVENUE (JAN-JUL 2017) n2.69bn N873.3M N/A N222.9M*

Average Average Average Monthly Monthly Average Monthly Internally N3.79bn* Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N3.24bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N30.92bn (JAN-JUN 2017) Domestic N1.74bn* Debt AVERAGE MONTHLY OVERHEAD N4.97bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.97bn* $22.1m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N3.80bn* (2016) Shortfall -N1.18bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 18 OPPORTUNITIES Sustainability Rank Ease of Doing 34 Business N/A Days

Livestock Alfafa Honey Starting a BORNO STATE Business

Borno State is the largest in Nigeria, with a hectares of farmland now well below landmass of about 72,609 kilometers; prior to production, must press on. The State could the upsurge of insurgency in 2009, the chief put 1,000,000 hectares of deserted lands occupation here was farming. under alfafa cultivation, as a means to attract cattle into its grazing area. Significant Borno’s annual Recurrent Expenditure investment will also required for the stands at N59.6bn for 2017, with average protection of farmlands – the primary driver monthly FAAC revenue in the first six months of the economy. of 2017 pegged at N3.3bn, and IGR figures (based on 2016 collection figures) estimated Borno could also choose to become a net at N222mn per month. These last two figures exporter of honey. With the global trade in suggest it may be nearly impossible for Borno honey estimated at $6.6bn in 2016, Borno to meet its projected monthly Recurrent may deploy funding towards large-scale Expenditure commitments of N4.96bn, as pollination of flowering plants, which can be contained in its 2017 budget proposal. The added to the alfafa plantation to ensure State is also proposing a seemingly balance and nutritional grazing. unrealistic Capital Expenditure spending of N124bn for 2017.

In terms of obligations, the State’s wage bill is projected to be N59.6bn for 2017, somewhat lower than 2016 figures of N51bn; Overhead costs are expected to be in the region of N23bn in 2017. The State could put 1,000,000 hectares of deserted lands under alfafa cultivation, as a With a Domestic debt of N30.9bn as at end- means to attract cattle into its grazing area. December 2016, the State may in the nearest Significant investment will also required for future incur more debt, as it tries to revive the the protection of farmlands – the primary economy in the aftermath of a seeming driver of the economy. decline of insurgency within its borders. Schools, central mosques, general hospitals and dispensaries, local government secretariats, police stations and barracks as well as primary healthcare centres and boreholes for water supply have been built, and are being rebuilt.

Though the prospects of regaining financial security are directly hinged on the Federal government’s ongoing anti-insurgency war, Borno, with its approximately five million

State of State 19 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N2.99bn 83,596 59 90 4.4% N1.67bn (1000 birth) (1000 birth) N1.64bn N1.63bn Projected HIV Infant Under 5 HIV N1.34bn N1.31bn Prevalence N1.27bn Population Mortality Mortality 2014 Rate 2014 2014 2012

Cross-River State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N51.4bn 2012 N12.7bn 2012 N108.5bn 2013 N53.5bn 2013 N12.0bn 2013 N135.5bn 2014 N49.8bn 2014 N15.7bn 2014 N131.1bn 2015 N30.0bn 2015 N13.6bn 2015 N142.4bn 2016 N17.4bn 2016 N14.8bn 2016 N163.4bn/

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 42.11% Structure of State’s Revenue 2017 NET FAAC

Pineapple Timber Cocoa 2,997,678.73tons (2015) 57.89%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) 910.6m N782.3M N/A N1.23bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N2.92bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N4.73bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N128.1bn (JAN-JUN 2017) Domestic N1.48bn* Debt AVERAGE MONTHLY OVERHEAD N6.21bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N6.21bn* $114.9m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N2.92bn* (JAN - JUN 2017) (2016) Shortfall -N3.29bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of State 20 OPPORTUNITIES Sustainability Rank Ease of Doing 31 Business 32 Days

Cocoa Sea Port Carbon Trading Starting a CROSS-RIVER STATE Business

Cross River State is on a massive wealth Marina; Calabar Residency Museum and the creation journey to achieve and maintain Calabar Slave Park; the Ikom Monoliths; the economic relevance. Some rather ambitious Cross River National Park, Afi Mountain capital projects that the State has taken on walkway and the annual Calabar Carnival are include the 260km super highway; the Eastern some of the vast tourist attractions already able Boki-Western Boki Link Road; the Bakassi to boost the treasury. Deep Seaport; Cross River Garment Factory and Calabar Rice city. Cross River must exploit the fact that she accounts for approximately 58% of forests in This is amid a budget size of N301bn for 2017, Nigeria; a vast 6,000 square kilometers. The slightly lower than the N303bn budget for 2016. State will have to find ways to sustainably Essentially, 75.2% of Cross River’s 2017 budget manage these resources; its plans to build a has been earmarked for Capital Expenditure, superhighway through most of the forest despite her earning FAAC receipts of just primarily to move goods from the Calabar port N5.92bn in the first four months of 2017. onwards, is understandably seen by critics as encouraging the deforestation of Nigeria on a If speedily executed, spending on capital large scale. Alternatively, the State may seek to projects should ordinarily have a positive impact draw revenue via the carbon trading initiative. on 2017 receipts. However, with its Personnel Cost sitting at N56.78bn, and Overheads The State could also potentially become a net totalling N17.93bn, the projected Capital exporter of palm oil by putting 500,000 Expenditure of N226.48bn for 2017 comes off hectares or more of farmland under palm oil as somewhat unrealistic, owing to the general plantation and creating jobs along the value lesser purchasing power and lower demand chain. Cocoa cultivation is another commodity brought on by the country’s current economic Cross River can delve into, provided its logistic condition. infrastructure is extensively improved. The Calabar port will need to be dredged, and These infrastructural expansion plans will also aggressive marketing will be the added definitely jerk up Cross River’s debt profile, as complement to position the State as a hub of her External and Domestic debt profile stood at commerce for the South-South, South-East $114.9mn and N128.14bn in 2016. Although the and North-East zones. State has continued to fulfill her monthly Recurrent Expenditure obligations, other A Calabar-Lagos High Speed Rail track will prospective revenue generation sectors, such open up the State to other markets; securing as agriculture, have relatively minimal impact on administrative and legal backing from the her economy. Federal and partner State governments is key, to ensure the project operates at full capacity. The slight increase in Cross River’s IGR Given that abundant limestone deposits exist receipts from N13.56 in 2015 to N14.77 in 2016 in the State, Cross River could also aim to be a can be maintained in 2017. Away from new net exporter of building materials. The present initiatives, existing economic opportunities administration will need to attract more abound in the tourism sector, which could investors at home and abroad, to actualize its positively push up the IGR figures. The current ambitions towards industrial revolution. Agbokim and Kwa waterfalls; the Calabar

State of States 21 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N8.26bn N7.91bn N7.46bn 34,717 38 53 0.7% N7.38bn N6.49bn (1000 birth) (1000 birth) N6.24bn N6.17bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Delta State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 / N203.7bn 2012 N50.2bn 2012 N86.6bn 2013 / N217.9bn 2013 N42.8bn 2013 N105.2bn 2014 N188.9bn 2014 N44.1bn 2014 N216.3bn 2015 N120.1bn 2015 N40.8bn 2015 / N328.3bn 2016 N71.9bn 2016 N44.1bn 2016 / N254.2bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 24.22% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cassava Rubber 132,876.02tons (2015) 75.78%

IGR AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.86bn N915.1M N4.36bn N3.67bn*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N10.80bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N5.70bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N241.2bn (JAN-JUN 2017) Domestic N7.46bn* Debt AVERAGE MONTHLY OVERHEAD N13.17bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N13.17bn* $42.3m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N10.80bn* (2016) Shortfall -N2.36bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 22 OPPORTUNITIES Sustainability Rank Ease of Doing 7 Business 35 Days

Lignite Sea Port Ply Wood Starting a DELTA STATE Business

Delta State, awash with huge deposits of manufacturing sub-sector; the State will Crude oil, is one Nigeria’s largest producers have to work with the federal government to of petroleum products. Despite the economic negotiate trade deals with net takers of downturn, the State has earmarked the sum resulting end-products. of N119.001bn for Capital Expenditure for the 2017 fiscal year, with road infrastructure Every manufacturing hub needs power, and taking 29.41% of the budget – a significant Delta’s lignite deposit could be explored for N35bn. To achieve the massive investment in electricity generation. Delta is connected to capital projects amid volatility in the oil the Middle Belt (a major grain hub) via rail markets and the attendant lower FAAC and water; she can leverage on this to allocations, Delta will need to intensify its develop ports as an export hub for drive to boost internally generated revenue commodity along the rail corridor. Significant (IGR). investments in silos, warehouses and the like will be needed, to obtain maximum In 2015 IGR was N40.8bn, a small increase operational capacity for greater revenue from 2016 (N44.8bn) therefore, to remain receipts. viable, the State must expand its revenue base through diverse sources other than Away from basic fishing, Delta can also PAYE taxation, whilst reducing huge exploit its coastlines for the fabrication of spending on purchase of utilities. ships, as well as commit to boosting infrastructure at the Koko Free Trade Zone, Delta’s debt profile continues to assume a if she hopes to achieve pre-set goals as an chequered pace, as Domestic and External industrial leader in the region. debt for 2016 were pegged at N241.2bn and $42.3bn, compared to 2015 figures of N320.6bn and $38.8bn.

This is one of several reasons why, with its significant deposits of industrial clay, silica, Delta is connected to the Middle Belt lignite, kaolin, tar sand and limestone, Delta (a major grain hub) via rail and water; she does not have to necessarily remain a can leverage on this to develop ports as an predominantly crude oil and agro-based export hub for commodity along the rail economy. corridor. The State could become a net exporter of engineered/composite wood by producing plywood, particleboards, fibreboards, etc., thereby assisting Nigeria to close her 20- million housing deficit. Investments could also go into converting Delta’s hydrocarbon resources into adhesives that boost production capacity of the engineered wood

State of States 23 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 55 83 29,156 0.9% N3.89bn (1000 birth) (1000 birth) N2.73bn N2.69bn N2.75bn Projected HIV Infant Under 5 HIV N2.37bn N2.46bn N2.42bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Ebonyi State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N37.9bn 2012 N8.2bn 2012 N35.4bn 2013 N42.2bn 2013 N10.4bn 2013 N20.1bn 2014 N39.5bn 2014 N11.0bn 2014 N15.2bn 2015 N30.5bn 2015 N11.03bn 2015 N43.5bn 2016 N28.4bn 2016 N2.34bn 2016 N42.3bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 6.61% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Sweet Potato Rice 691,843.04tons 93.39% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.03bn N731.2M N/A N195.2M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N2.95bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N0.86bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) (JAN-JUN 2017) N28.1bn Domestic N2.49bn* Debt AVERAGE MONTHLY OVERHEAD N3.35bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) $46.3m MONTHLY RECURRENT N3.35bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N2.95bn* (2016) Shortfall -N0.39bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 24 OPPORTUNITIES Sustainability Rank Ease of Doing 26 Business 34 Days

Rice Potatoes Industrial Starch Starting a EBONYI STATE Business

Ebonyi ranks among one of the youngest As Ebonyi gets a monthly average of States, but is arguably the largest producer of N2.57bn in FAAC allocations, it must ramp rice, cassava, yam, potatoes, maize and beans up its revenue drive from diverse sources. in Nigeria. The opportunities here center around the agriculture sector, which the governor has Sadly in 2016, the State’s internally generated made a priority. Abakaliki rice, which for revenue (IGR) dropped to N2.42bn, from many years disappeared from many tables in N11.03bn in 2015. Its FAAC allocations also the South-east as a food staple, has continue to reduce, based on dwindling oil witnessed a major resurgence, helping to prices, with a total of N15.4bn received from push the down the price of this crop in the January to June 2017 as FAAC allocations. region. From 120 metric tons of rice However, in its spending plan tagged: processed daily, output today stands at 180 “Budget of Inclusive Growth and Poverty metric tons, with room to process more, due Reduction in Economic Recession,” a to increased demand nationwide. whopping N87.1bn is set aside for Capital Expenditure, while N40.17 will cover This could be achieved by attracting more Recurrent Expenditure commitments, putting investors who would set up modernised rice the complete budget at N127.2bn. processing mills, as well as incentivising paddy rice farmers, such that although This is 25.82% higher than the N101.1bn spent Ebonyi has targeted 350,000 metric tons of in 2016. With N57.1bn allocated to roads, rice by the end of the year, it could achieve 1- water, electricity, agriculture, commerce and 2 million metric tons before the end of 2019. industries, it is evident that the governor has This would be a notable share of the rice huge plans to expand infrastructure in market, in a country with an estimated Ebonyi. consumption of six million metric tons per The State has a Domestic debt profile of annum. N28.05bn and External debt profile of N46.4m for 2016 – a reduction from 2015 figures of N34.2bn and $46.1mn. Abakaliki rice, which for many years Despite this debt, coupled with the general disappeared from many tables in the South- economic downturn, Ebonyi is one of the very east as a food staple, has witnessed a major few that has not defaulted in fulfilling its resurgence, helping to push the down the monthly Recurrent Expenditure obligations, price of this crop in the region. From 120 except for its halting of the contributory metric tons of rice processed daily, output pension scheme. This singular move has today stands at 180 metric tons, with room likely put the fate of retiring workers in to process more, due to increased demand uncertainty, effectively putting pressure on nationwide. health, housing, education, purchasing power and other social indices in the State.

State of States 25 HEALTH INDICATORS

NET FAAC ALLOCATION 2017

22,821 55 83 0.8% N3.66bn (1000 birth) (1000 birth) N2.51bn N2.34bn N2.37bn Projected HIV Infant Under 5 HIV N2.12bn N2.05bn Prevalence N2.04bn Population Mortality Mortality 2014 Rate 2014 2014 2012

Edo State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N58.4bn 2012 N18.9bn 2012 N68.9bn 2013 N65.2bn 2013 N18.9bn 2013 N55.3bn 2014 N58.1bn 2014 N17.0bn 2014 N62.3bn 2015 N40.1bn 2015 N19.1bn 2015 N79.5bn 2016 N25.5bn 2016 N23.0bn 2016 N101.4bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 41.86% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Banana Fish 750,969.21tons 58.14% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.59bn N847.1M N226.6BN N1.92bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N4.59bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.69bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) (JAN-JUN 2017) N45.1bn Domestic N3.69bn* Debt AVERAGE MONTHLY OVERHEAD N6.38bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N6.38bn* $183.6m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N4.36bn* (2016) Shortfall -N2.02bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 26 OPPORTUNITIES Sustainability Rank Ease of Doing 11 Business 36 Days

Oil Palm Rubber Cashew Starting a EDO STATE Business

Edo State has one of the largest oil palm acquire about 100,000 hectares of land for yields in Nigeria; her economy boasts of the development of oil palm estates.” Crude oil and other agricultural products We advise that the timelines in which this such as rubber and cashew, which project will be achieved are crucial, if Edo contributes to Nigeria’s export revenue hopes to make a dent in its debt profile and earnings. shore up revenue figures.

The present administration has placed The Gelegele Seaport, which is to be prioritised the enforcement of Edo’s town transformed into a container port, holds planning laws, completing roads and great promise, if Edo aggressively revitalises drainages across senatorial districts, kicking her rubber industry – especially as the off a cleanup and beautification programme commodity trades at about $2,000 per ton. If for the capital of Benin City, whilst ensuring Edo puts 400,000 hectares under rubber interventionist programmes for are on the cultivation and invests in research to take front burner. yield above four tons per hectares, its rubber-based economy could top $3bn in Notably, internally generated revenue (IGR) the near term. increased from N19.1bn in 2015 to N23bn in 2016, with FAAC allocations for the first four Investment in rail infrastructure could also months of 2017 now at N9bn; as an oil- potentially open the State to the Southwest producing State, Edo is also a beneficiary of and Northwest corridor, ensuring a smooth the 13% derivation funds. transfer of goods and services that in turn results in a smooth transfer of funds into the The 2017 budget has set aside a total of public purse. N74.9bn for Recurrent Expenditure, and N75.11bn for Capital Expenditure. A major issue that calls for concern however is Edo’s debt profile – while Domestic debt as at December 2016 was N45.09bn, External debt The Gelegele Seaport, which is to be rose from $168.18mn in 2016 to $183.6mn in transformed into a container port, holds 2016. great promise, if Edo aggressively revitalises her rubber industry – especially as the commodity trades at about $2,000 per ton. As the State is struggling to consistently fulfill If Edo puts 400,000 hectares under rubber monthly Recurrent Expenditure obligations, it cultivation and invests in research to take is time to strategically tap into the various yield above four tons per hectares, its rubber- economic opportunities within its borders. In based economy could top $3bn in the near this regard, the State has shown initiative by term. trying to resuscitate its rubber and palm plantations in conjunction with the private sector, likely to increase earnings. The plan is to “leverage on high-yielding varieties and long tradition of oil palm production to

State of States 27 HEALTH INDICATORS

17,977 33 45 0.2% NET FAAC ALLOCATION 2017 N3.05bn (1000 birth) (1000 birth) N1.85bn N1.86bn N1.55bn N1.82bn N1.61bn Projected HIV Infant Under 5 HIV N1.55bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Ekiti State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N39.8bn 2012 N3.8bn 2012 N45.2bn 2013 N44.3bn 2013 N2.3bn 2013 N28.3bn 2014 N40.1bn 2014 N3.4bn 2014 N38.9bn 2015 N28.2bn 2015 N3.3bn 2015 N63.4bn 2016 N18.8bn 2016 N2.9bn 2016 N102.5bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 11.61% Structure of State’s Revenue 2017 NET FAAC

Cocoa Cassava Yam 117,467.58tons (2015) 88.39%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.16bn N731.7M N/A N249.3m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N2.15bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N1.38bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N85.0bn (JAN-JUN 2017) Domestic N3.21bn* Debt AVERAGE MONTHLY OVERHEAD N4.59bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.59bn* $56.9m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue

(JAN - JUN 2017) N2.15bn* (2016) Shortfall -N2.44bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 28 OPPORTUNITIES Sustainability Rank Ease of Doing 35 Business 34 Days

Granite Red Bricks Tourism Starting a EKITI STATE Business

Ekiti State is one with a largely agricultural dominant occupation that provides economy, which contributed significantly to employment and income for over 80% of the trade activities in the colonial and population, is a good place to start. postcolonial era. She is still flush with Investments into the main cash crops of abundant natural resources and other cocoa, oil palm and timber must be economic viabilities, though these are not accelerated, while others such as sorghum being exploited at maximum capacity. could become major industrial feedstock. As farming rakes in over 90% of Ekiti’s Gross This situation is likely a contributing factor to Domestic Product (GDP), this sector needs the reality where Ekiti has joined some of its to be revamped on all fronts, for greater peers in debt, with over $56.9mn of External export opportunities. debt and N85bn in Domestic debt as at December 2016. In addition, Ekiti’s internally Ekiti could also tap into its significant clay generated revenue falls on the lower end of deposits and become a net producer of tiles, the spectrum – IGR figures for 2016 stand at whilst exploiting its other mineral resources, N7.74bn, and for the first six months of 2017, most of which remain untapped. These Ekiti has received an average of N1.7bn in include feldspar, muscovite, bauxite clay, monthly FAAC allocations. Revenue from cassiterite, columbite and tantalite, which are FAAC may drop in the long term, due to all found in Ijero. The ceramic (ball) clays and recession and undulating oil production and kaolinite clays available at Isan Ekiti, as well prices. as the recently-revived Ire burnt-brick factory could ensure the State emerges a In 2016, Ekiti recorded N36.9bn as total supplier of bricks to the Nigerian Revenue, but Recurrent Expenditure came to construction industry, a development that N41.4bn, leaving a shortfall of N4.48bn. As could deliver close to 200,000 jobs and approved spending for Personnel costs in significant revenue potentials. The State will 2017 is N16.55bn, should Ekiti’s IGR trend need to promote its unique type red brick persist, then the State is bound depend more aggressively, as the national construction on FAAC allocations to remain financially sector tends to lean more towards concrete viable, or she may probably withdraw from the block usage. Paris Club refund pot, to fulfill her monthly Recurrent expenditure obligations. Already, Ekiti could also draw in more revenue if they civil servants are being owed salaries for six can transform the Ikogosi Warm Spring into months (November 2016 to April 2017). a large income driver, as tourism remains a fast revenue earner, provided requisite Notably, budget size has almost doubled, investments are made, and maintained. from N53.26bn in 2016 to N94.45 for 2017; with a 32.87% increase in Recurrent expenditure for 2017, Ekiti must kick start other revenue-generating sectors, to increase its economic status and the living standards of residents. Agriculture, being the

State of States 29 HEALTH INDICATORS

N4.18bn 56 86 NET FAAC ALLOCATION 2017 34,268 1.3% N2.89bn (1000 birth) (1000 birth) N2.84bn N2.84bn N2.48bn N2.54bn N2.52bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Enugu State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N50.0bn 2012 N12.2bn 2012 N25.2bn 2013 N55.3bn 2013 N20.2bn 2013 N20.5bn 2014 N51.7bn 2014 N19.3bn 2014 N35.1bn 2015 N39.0bn 2015 N18.1bn 2015 N51.7bn 2016 N30.9bn 2016 N14.2bn 2016 N70.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 29.04% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cassava Melon 14,833.34tons 70.96% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.04bn N849.1M N/A N1.19BN*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated N4.08bn* (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.27bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N48.4bn (JAN-JUN 2017) Domestic N2.33bn* Debt AVERAGE MONTHLY OVERHEAD N4.60bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.60bn* $53.59m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N4.08bn* (2016) (JAN - JUN 2017) Shortfall -N0.51bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 3 0 OPPORTUNITIES Sustainability Rank Ease of Doing 8 Business 33 Days

Tourism Red Bricks Wind Power Starting a ENUGU STATE Business

Enugu’s 2017 budget provides for a Recurrent of formalising these sectors, making use of its expenditure spend of N55.2bn, up from 2016 location to attract industrial manufacturers estimates of N43.7bn. Interestingly, the average with heavy energy requirements. share of its revenue from FAAC allocations in the first six months of 2017 was N2.68bn, while The abundant clay deposits in Enugu, if tapped, its IGR uptake is projected at approximately could elevate it into a brick manufacturing N1bn monthly. With Enugu’s monthly revenue base, which could produce close to one billion not expected to be significantly higher than units of bricks, to service the South-South, N3.7bn, the State must find ways to rein in its North-Central and South-East construction Recurrent expenditure figures, which are markets, with the potential for export estimated at N4.6bn in the 2017 budget. opportunities.

In the first half of 2016, N21.9bn went to To maintain a place as a regional market Recurrent expenditure, while actual Revenue leader, Enugu will also have to improve on the collected by Enugu was N32.78bn, chiefly from ease of doing business, its infrastructure, and FAAC receipts. systematically invest more in the education of To maintain such a trend, the State will need to its growing working population. start implementing strategies that improve its IGR uptake and reverse the sustained drop in Though the effect of the Paris Climate Accord its independent revenue earnings. on the coal mining sector (and by extension Enugu’s revenue from coal) cannot be Enugu’s IGR figures in 2013, 2014 and 2015 was immediately ascertained, worth noting is that N20.2bn, N19.66bn and N17.98bn respectively, its tourism and renewable energy potentials whilst national statistics projected IGR for 2016 could help offset any negative effect on at N14.2bn. The State government’s data earnings in the interim. For instance, the however showed that actual IGR as at mid-2016 State’s wind energy potential is well was N6.1bn; significantly below a mid-year documented by the ministry of Science and target of N9.4bn. Technology, and therefore Enugu will benefit greatly by ensuring alternative energy Also, Enugu’s domestic debt as at December initiatives become mainstream. 2016 stood at N48.4bn, which suggests a relatively manageable threshold, when Also, her beautiful lakes, caves, hills, falls, and compared with its peers that share almost the springs could gain more prominence as same IGR figures. The State must however attractive locations for Nigerian and foreign watch its Recurrent expenditure closely, as this tourists if further developed, promoted and might push the debt numbers higher in the made more secure, which in turn could medium to long term. significantly boost Enugu’s earning prospects in the medium to long term. To get extra Revenue, Enugu must look to its population; about 3,200 people work in its Mining sector, up to 58,000 people work in Manufacturing, and 1.4million are in Agriculture, according to the National Bureau of Statistics. The State should therefore start exploring ways

State of States 31 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 49,378 29 37 7.5% N3.56bn N2.37bn (1000 birth) (1000 birth) N2.30bn N2.32bn N1.93bn N2.06bn N2.02bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Gombe State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N42.2bn 2012 N3.71bn 2012 N35.2bn 2013 N46.9bn 2013 N3.87bn 2013 N33.4bn 2014 N42.1bn 2014 N5.19bn 2014 N36.7bn 2015 N29.5bn 2015 N4.78bn 2015 N61.3bn 2016 N22.4bn 2016 N2.94bn 2016 N70.1bn

TOP AGRICULTURAL PRODUCTS IGR SOLID MINERAL PRODUCTION 9.39% Structure of State’s Revenue 2017 NET FAAC

Gum Arabic Tomatoes Sorghum 917,217.90tons (2015) 90.61%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.63bn N732.4M N/A N245.1m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N2.61bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N1.44bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N48.3bn (JAN-JUN 2017) Domestic N2.47bn* Debt AVERAGE MONTHLY OVERHEAD N3.91bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N3.91bn* $37.84m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS (JAN - JUN 2017) N2.61bn* (2016) Shortfall -N1.30bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 32 OPPORTUNITIES Sustainability Rank Ease of Doing 32 Business 23 Days

Tourism Cotton Cement Starting a GOMBE STATE Business

Gombe State seems to be on a promising based, with the exception of Ashaka Cement. journey in the last two years, admirably focusing Cotton production holds significant promise, as more on the education sector. However, it investment in research and modern techniques appears that not much has been done in terms could potentially lift yield upwards, with of finding ways to attract investors to the rich increased earnings in tow. If Gombe were agricultural portfolio of a State that also holds willing to put one million hectares under cotton considerable prospects for entrepreneurs, and cultivation alone, its total output could top five tourists. million bales per annum.

Gombe’s 2017 budget stands at N85bn, with Gombe must also exploit its solid mineral- Recurrent and Capital expenditure taking based industrial potentials, including those to 53.71% and 46.29% respectively. Average do with the manufacture of paints, ceramics, monthly FAAC allocations from January to blocks, glass/bottles, as well as metal June 2017 came to N2.17bn, while internally fabrication, jewelry and gem cutting. Gombe generated revenue as at October 2016 was could also explore the establishment of N2.54bn. With IGR as low as N2.54bn, average pharmaceutical blending industries, a peculiar monthly FAAC allocations of N2.17bn, as well as venture that could shore up revenue. Domestic and External debt profiles sitting at N48.3bn and $37.8m respectively, these figures Noteworthy is that the government has issued suggest that Gombe is in a precarious position. comprehensive documents on the Industrial Her revenue –whether from FAAC or internal Policy of Gombe State and on the Gombe sources—remains modest, pushing Gombe into State Investment Guide, both of which provides the category of financially unviable sub- attractive incentives for investors wishing to national units within the federation. invest in the State. This will undoubtedly ease external communication of Gombe’s In 2011, the Bank of Industry approved a loan willingness to do business. worth N903.4mn for the development of Micro, Small and Medium Enterprises (MSMEs) in In the tourism and hospitality sector, Gombe State, out of which 80% was investment opportunities of note fall under the specifically dedicated to agro-processing, establishment of hotels, amusement parks, since the State is largely agrarian. zoos, cinemas, as well as museums and art Unfortunately, very little information exists on galleries development. Also pertinent is the the distribution of this loan. need for huge investments in this sector, to upgrade the aesthetic and business profile of Gombe’s people, her vast agricultural potential Gombe State. and numerous mineral resources constitute invaluable assets for economic investments. If properly harnessed, particularly for agro-based and solid mineral based manufacturing industries, these could ensure the State makes a break towards financial security. But first, Gombe must modernize its outlook, as most of the existing industries within its borders were those established long before the State itself was created. These are mostly agro-

State of States 33 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.25bn 93,822 101 167 3.4% N2.83bn N2.93bn (1000 birth) (1000 birth) N2.71bn N2.54bn N2.79bn N2.37bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Imo State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N57.3bn 2012 N6.81bn 2012 N24.8bn 2013 N62.8bn 2013 N7.58bn 2013 N21.0bn 2014 N55.8bn 2014 N8.12bn 2014 N38.5bn 2015 N39.5bn 2015 N5.47bn 2015 N83.4bn 2016 N30.2bn 2016 N5.87bn 2016 N111.7bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 13.28% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cassava Rice 17,808.00tons (2015) 86.72%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.06bn N864.2M N275.1m N489.3m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.41bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.04bn* RECURRENT EXPENDITURE AVERAGE MONTHLY PERSONNEL (JAN-JUN 2017) COST (JAN-JUN 2017) N93.3bn Domestic N2.44bn* Debt N4.48bn* AVERAGE MONTHLY OVERHEAD COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.48bn* $60.22m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N3.41bn* (JAN - JUN 2017) (2016) Shortfall -N1.07bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 3 4 OPPORTUNITIES Sustainability Rank Ease of Doing 22 Business 34 Days

Oil Palm Rice Starting a IMO STATE Fish Business

Imo State’s budget for 2017 calls for a Imo may also decide to reverse the current Recurrent spend of N53.7bn, down from 2015 situation where its largest natural lake now projections of N60.7bn per annum; N77.4bn serves in part as a septic pool for domestic should be going into administrative and urban sewage. The Oguta Lake, if revamped, developmental capital projects, if the budget is holds huge promise for the public purse; implemented in full. careful planning, regeneration and investment, could see it remain a tourist favourite, as well as Imo however has an economy still centred emerge a fishery production haven. around agriculture and trade – the biggest proportion of these activities is happening Other investment opportunities include informally; a situation that is often cited as chemical production, which could serve the contributing to Imo’s abysmal IGR earnings. steady demand for industrial feedstock from the oil and gas sector. Oil palm cultivation could In 2016, IGR was approximately N5.87bn, also see a boost, if Imo’s equatorial rain forest significantly lower than 2014 levels of N8.1bn. belt with an average annual rainfall of 3,100 mm Imo’s average monthly share of FAAC could be put to use with the requisite allocations for the first six months of 2017 came investments. to N2.69bn, while she plans to spend N4.48bn monthly on Recurrent items alone. As the The foregoing is pertinent, due to Imo’s rising State’s revenue is not expected to be debt profile. Domestic debt moved from significantly higher than N3.2bn, she may have N12.3bn in 2013 to N93.3bn as at the end of to pool funds from savings, grants, or even 2016 on the back of rapidly expanding borrow to meet Recurrent expenditure Overheads. Extensive reduction and commitments. If these measures do not elicit formalization of its workforce as well as a rapid the needed relief, Imo may have to rein in improvement of its internal revenue uptake is Overheads - the costs of keeping its key to Imo State achieving financial viability. administrative unit within government running.

To boost revenue, Imo has a retinue of options. The State could tap into its status as an oil- producing one with approximately 163 oil wells across 12 locations, as well as exploit its deposits of natural gas, lead, calcium carbonate Oil palm cultivation could also see a boost, and zinc production potentials. Abundant white if Imo’s equatorial rain forest belt with an clay could be transformed into revenue from average annual rainfall of 3,100 mm could be ceramics manufacturing, while Imo’s limestone put to use with the requisite investments. could be purposed for industrial cement production. In the latter instance, incentives could be granted to private and public entities that construct roads, houses and other infrastructure, provided they use State- produced cement.

State of States 35 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.95bn 71,051 76 120 2.5% N3.46bn N3.47bn N3.49bn (1000 birth) (1000 birth) N3.13bn N3.13bn Projected HIV Infant Under 5 HIV N3.07bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Jigawa State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N58.3bn 2012 N7.88bn 2012 N7.34bn 2013 N64.1bn 2013 N9.76bn 2013 N7.33bn 2014 N58.0bn 2014 N6.27bn 2014 N8.03bn 2015 N44.7bn 2015 N5.08bn 2015 N28.9bn 2016 N36.2bn 2016 N3.54bn 2016 N28.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 7.71% Structure of State’s Revenue 2017 NET FAAC

Cow Pea Sorghum Livestock 84,406.81tons 92.29% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.61bn N909.2M N/a N294.6m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.82bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N3.13bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N19.01bn (JAN-JUN 2017) Domestic N2.03bn* Debt AVERAGE MONTHLY OVERHEAD N5.16bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N5.16bn* $32.42m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N3.82bn* (2016) Shortfall -N1.33bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 3 6 OPPORTUNITIES Sustainability Rank Ease of Doing 28 Business 34 Days

Wind Power Soy Beans Tomatoes Starting a JIGAWA STATE Business

Efforts are ongoing to make Jigawa State an be processing grains into flour and grits; the industrial hub; most notable is the plan to build a Jigawa State Dairy Products and model farm at White Refined Sugar Processing factory, which Birnin Kudu; the Sugar Processing Company will have an output of over 100,000 tons of at Sara as well as the Atafi Rice Processing Sugar annually, and independent units that Company at Hadejia for paddy rice have all produce food seasoning, organic fertilizers and been completed and reported as functioning. high-density fiberboards, whilst also generating The next few months and indeed years could 17MW of electricity. see a turnaround of Jigawa’s fortunes, provided she maintains, and expands upon In the interim, this agrarian State has sizeable these initiatives. Domestic debt worth N19bn and External debt pegged at $32.4mn. For 2017, Jigawa proposed We strongly recommend that the proposed a budget of N127.8bn, earmarking N66bn for Fertiliser Manufacturing Industry; Meat Capital expenditure and N37.5bn to offset Processing Industry and Sheet Glass Personnel costs. As at December 2016, total Manufacturing Industry is completed on time IGR was N3.5bn and the average FAAC and is fully functional. This could attract more disbursements received for the first six months investors, provided the ongoing electrification of 2017 amounted to N3.29bn. It is evident that of villages and towns to the national grid without the monthly federally-collected system by the Jigawa State Rural Electricity revenue from FAAC, Jigawa’s books will likely Board continues apace. remain in the red. This could continue to be a factor that impedes essential infrastructural Jigawa has shown a penchant for renewable development for its people. energy sources, by mounting wind turbine in its grazing reserves. We recommend that the We advise that Jigawa’s best chances lie in its State must toe this path aggressively; a wind diverse agricultural produce. As part of its turbine could generate approximately 3MW of efforts to replace subsistence farming with electricity, meaning Jigawa could be on course commercial agriculture, the State government to potentially supply close to 5,000MW into the introduced a cluster farming initiative, where desperately underserved Nigerian energy four target crops (rice, groundnuts, sesame, market. and soy beans) were identified as core areas of competitive advantage upon which Jigawa can boost revenue figures. As part of its efforts to replace subsistence We concur with established estimates that the farming with commercial agriculture, the introduction of this scheme could result in an State government introduced a cluster average yield of 10 tons per hectare for rice in farming initiative, where four target crops the next few years. (rice, groundnuts, sesame, and soy beans) were identified as core areas of competitive Jigawa is right to also merge industrial-scale advantage upon which Jigawa can boost agriculture with manufacturing in these areas: revenue figures. the Jigawa Tomato and Citrus Processing model farm located at Kazaure; the Jigawa State Flour Mills and allied products, which will

State of States 37 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N5.52bn 334,445 95 155 2.1% N3.79bn N3.79bn N3.88bn (1000 birth) (1000 birth) N3.42bn Projected HIV Infant Under 5 HIV N3.39bn N3.39bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Kaduna State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N64.4bn 2012 N11.53bn 2012 N56.52bn 2013 N69.9bn 2013 N10.93bn 2013 N48.33 2014 N62.9bn 2014 N12.78bn 2014 N59.11bn 2015 N48.6bn 2015 N13.56bn** 2015 N94.51bn 2016 N39.9bn 2016 N17.05bn 2016 N131.56bn ** Kaduna State Audited Account

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 26.79% Structure of State’s Revenue 2017 NET FAAC

Sugarcane Livestock Maize 183,314.49tons 73.21% (Poultry) (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.78bn N1.10bn N/a N1.42bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N5.30bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N3.32bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N63.27bn (JAN-JUN 2017) Domestic N3.64bn* Debt AVERAGE MONTHLY OVERHEAD N6.96bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N6.96bn* $222.88m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N5.30bn* (2016) Shortfall -N1.65bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 3 8 OPPORTUNITIES Sustainability Rank Ease of Doing 15 Business 31 Days

Livestock Logistic Hub Feedmills Starting a KADUNA STATE Business

Kaduna State embarked on a series of reforms Further afield, Kaduna is an important junction some years ago, including the building an on Nigeria’s narrow gauge railway network – a electronic revenue collection platform, workers’ branch line connects the Lagos–Nguru verification exercises, reducing its 24 ministries Railway to the Port Harcourt–Maiduguri to 13, and consolidating its financial accounts Railway, strategically positioning the State as a (under the Treasury single accounting commercial hub. Kaduna could leverage on initiative). However, the results of these this to build the requisite logistical support reforms, in terms of savings made on Personnel infrastructure that ensures it emerges a cost and Overhead costs, are varied. service center for the northern region – a move that will ensure Kaduna benefits massively Kaduna’s IGR improved significantly to N23bn from Nigeria’s drive to become a net exporter in 2016, from N13.6bn in 2015, while its wage bill of agricultural and manufacturing products. was reduced from 2015 levels of N26.8bn to N21.8bn in 2016. In effect the State’s IGR alone Kaduna will need to revitalise its 17 grazing can offset its monetary obligations to its reserves of 172,000 hectares; significant workers. However, actual spending on Non- investment in fences, irrigation and the Staff Recurrent expenditure (Overheads) planting of legumes and grass, as well as a jumped to N26.2bn in 2016, a sharp rise from the resolving of longstanding security issues N18.6bn recorded in 2015. around grazing rights will be critical, if the State hopes to retain its cattle and pull investors in. With a 2017 Recurrent expenditure plan estimated at N83.7bn annually (or N6.98bn Finally, we advise Kaduna to leverage on the monthly) against average monthly revenues of Nigerian pipeline transportation system which N5.8bn, Kaduna may lean towards borrowing, brings crude from the Niger Delta oil fields, to to cover its recurrent expenditure obligations. build a hydro-carbon manufacturing base. The State’s share of FAAC receipts averages Kaduna is also connected by road and rail to N3.6bn monthly, while IGR uptake per month is Abuja and she could therefore consolidate estimated at N1.92bn. plans to become a net exporter of food and quality manufacturing products to Nigeria’s On the flip side, Kaduna may need to develop a rapidly expanding capital. sustainable path to financing its infrastructure plans including entering into a public-private partnership agreements. This is because her domestic debt profile was at N63.2bn as at the end of 2016, a 544.9% rise from 2013 levels of Kaduna is also connected by road and rail to N9.8bn. Abuja and she could therefore consolidate plans to become a net exporter of food and Kaduna’s strong agrarian economy could be quality manufacturing products to Nigeria’s further boosted towards profitability if the rapidly expanding capital. government pursues collaboration with organised private sector to restart some of its comatose agro-allied factories.

State of States 3 9 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N7.08bn 165,530 72 114 9.2% N5.03bn N5.02bn N5.00bn (1000 birth) (1000 birth) N4.53bn N4.54bn Projected HIV Infant Under 5 HIV N4.46bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Kano State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N83.4bn 2012 N11.05bn 2012 N15.51bn 2013 N92.2bn 2013 N17.14bn 2013 N42.40 2014 N82.3bn 2014 N13.66bn 2014 N42.24bn 2015 N64.1bn 2015 N13.61bn 2015 N76.37bn 2016 N50.6bn 2016 N30.96bn 2016 N163.37bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 33.63% Structure of State’s Revenue 2017 NET FAAC

Groundnut Livestock Cowpea 183,727.91tons (Cattle) (2015) 66.37%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N3.35bn N1.74bn N/a N2.58bn*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N7.67bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N4.92bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N93.72bn (JAN-JUN 2017) Domestic N1.70bn* Debt AVERAGE MONTHLY OVERHEAD N6.62bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) $53.25m MONTHLY RECURRENT N6.62bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N7.67bn* (2016) N1.05bn (Good Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 4 0 OPPORTUNITIES Sustainability Rank Ease of Doing 4 Business 40 Days

Feedmills Cotton Commerce Starting a KANO STATE Business

Internally generated revenue for Kano comes The State can also leverage on its irrigation to an average of N2.5bn monthly and its gross potentials to boost production for food crops monthly receipts from the FAAC allocations is including millet, cowpeas, sorghum, maize and approximately N4.62bn; a fall from 2015 rice, opting for the profitable markets on the estimates of N5.89bn. Lagos-Kano rail corridor; another strategy would be to become a major supplier of animal Total revenue which accrues to Kano monthly, feed, to service the booming South-West is therefore not expected to deviate poultry markets. significantly from N7.12bn. The Sitti-Rimi-Kibiya-Rano conclave, believed Considering its 2017 budget, which projects to hold significant resources such as laterite Recurrent expenditure obligations per month to rock, has the potential to elevate Kano’s civil lie around N14.95bn, it is clear that a drastic cut construction sector, and by extension the in Kano’s Overhead costs could be the most Nigerian economy. The Riruwai-Dajin Falgore effective way to keep it out of murky financial axis, endowed with deposits of lead, zinc, waters. The State must also reform its tax molybdenum, silver, copper and lithium may collection processes if its hopes to improve also be exploited, to raise Kano’s economic significantly on its revenue uptake. prospects. In particular, the global demand for lithium-based batteries across many devices, This is because her debt profile is expanding including phones, laptops and cars creates a rapidly; Domestic debt as at December 2016 huge opportunity for Kano to develop its was N93.7bn, compared to 2013 figures of mining sector. N31.4bn. Kano will have to rely on its industrial pedigree and revive, or where necessary expand, its status as a commercial hub in the sub-region.

The State’s share of federally collected revenue (FAAC) for the first six months of 2017 averaged N4.76bn monthly. We advise that as The State can also leverage on its irrigation one of Nigeria’s most populous States, and potentials to boost production for food crops given that Kano’s economy is centered around including millet, cowpeas, sorghum, maize and agriculture and trade, policy formulators must rice, opting for the profitable markets on the find a way to capture the over 3.5million Lagos-Kano rail corridor; another strategy workers within these sectors into the tax- would be to become a major supplier of paying bracket. animal feed, to service the booming South- West poultry markets. Furthermore, Kano must rebuild its industrial base, which was formally anchored around the Textile mills, and pursue new trade routes with neighbouring States. With more investment in research and modern techniques, Kano could potentially lift cotton yield to above one million bales per annum.

State of States 41 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N5.24bn 52,818 102 169 1.3% N3.62bn (1000 birth) (1000 birth) N3.60bn N3.24bn N3.64bn N3.25bn Projected HIV Infant Under 5 HIV N3.16bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Katsina State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N64.29n 2012 N5.02bn 2012 N12.58bn 2013 N69.54bn 2013 N6.85bn 2013 N12.03bn 2014 N63.38bn 2014 N6.22bn 2014 N14.87bn 2015 N48.37bn 2015 N5.79bn 2015 N25.73bn 2016 N38.39bn 2016 N5.55bn 2016 N42.29bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 11.16% Structure of State’s Revenue 2017 NET FAAC

Sorghum Livestock Cotton 89,591.46tons (2015) 88.84%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.66bn N1.02bn N/a N462.16M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N4.14bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N1.90bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N21.45bn (JAN-JUN 2017) Domestic N2.08bn* Debt AVERAGE MONTHLY OVERHEAD N3.98bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) $68.06m MONTHLY RECURRENT N3.98bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N4.14bn* Shortfall (2016) -N0.16bn (Good Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 42 OPPORTUNITIES Sustainability Rank Ease of Doing 12 Business 35 Days

Livestock Cotton Feedmills Starting a KATSINA STATE Business

Katsina’s Domestic debt was N21.4bn as at Katsina could go further by exploiting its Silica December 2016, from N269m in 2013. Her IGR Sand and Feldspar deposits, manufacturing for 2016 was an average of N5.55bn, slightly ceramics and glassware that is critical to below 2015 levels of N5.79bn. The State also sustaining the Nigerian construction and received FAAC disbursements averaging housing market. We also advise Katsina to N3.4bn monthly, for the first six months of 2017. maximize its potentials by designing a workable plan that not only covers the The 2017 budget is pegged at N140.2bn, with exploration and extraction of the 34 solid Recurrent expenditure projected at N47.7bn, or minerals within, but also foresees the building N3.975bn monthly—an amount that Katsina’s of a manufacturing base around the resulting average total monthly revenue of N3.5bn commodities. cannot cover. A coherent strategy on how best to grow IGR is therefore vital, and more sustainable in the long-term.

Measures Katsina could take include tapping into cotton, one of its foremost tradable commodities. The State can rebuild its economy around the cotton business, and may With its large land mass and climate, Katsina aim for a yearly output of five million bales, to is also strategically positioned to benefit from corner a share of the estimated $12bn global the renewable energy market by serving its market for cotton. Beyond the cultivation and needs, whilst making a dent in meeting production of seed cottons and lint, Katsina demands at national level. Presently, the may also move into light manufacturing of State has piloted a 10MW pilot wind farm cotton-based products. project; augmenting this with solar electricity and ramping up wind-based electricity With its large land mass and climate, Katsina is generation could leapfrog Katsina into also strategically positioned to benefit from the becoming a manufacturing and renewable renewable energy market by serving its needs, energy hub. whilst making a dent in meeting demands at national level. Presently, the State has piloted a 10MW pilot wind farm project; augmenting this with solar electricity and ramping up wind- based electricity generation could leapfrog Katsina into becoming a manufacturing and renewable energy hub.

In the near term, these energy sources could be put to use to boost other areas of revenue; for instance, cattle ranches and farms could be irrigated using solar and wind energy, thereby ramping up livestock production and pushing back desert encroachment respectively.

State of States 43 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 16,930 76 120 0.8% N4.40bn (1000 birth) (1000 birth) N3.03bn N3.01bn Projected HIV Infant Under 5 HIV N2.63bn N2.71bn N2.99bn N2.68bn Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Kebbi State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N51.78n 2012 N5.42bn 2012 N10.18bn 2013 N58.43bn 2013 N3.73bn 2013 N8.33bn 2014 N53.91bn 2014 N3.83bn 2014 N25.19bn 2015 N40.98bn 2015 N3.59bn 2015 N72.73bn 2016 N31.69bn 2016 N3.13bn 2016 N34.77bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 7.85% Structure of State’s Revenue 2017 NET FAAC

Maize Onions Rice 81,001.66tons 92.15% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.27bn N799.4m N/a N261.0M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated N3.33bn* (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N1.20bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N20.65bn (JAN-JUN 2017) Domestic N2.15bn* Debt AVERAGE MONTHLY OVERHEAD N3.35bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N3.35bn* $46.10m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N3.33bn* Shortfall (2016) -N0.03bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 4 4 OPPORTUNITIES Sustainability Rank Ease of Doing 16 Business 32 Days

Rice Wind Power Glassware Starting a KEBBI STATE Business

Katsina’s Domestic debt was N21.4bn as at Katsina could go further by exploiting its Silica December 2016, from N269m in 2013. Her IGR Sand and Feldspar deposits, manufacturing for 2016 was an average of N5.55bn, slightly ceramics and glassware that is critical to below 2015 levels of N5.79bn. The State also sustaining the Nigerian construction and received FAAC disbursements averaging housing market. N3.4bn monthly, for the first six months of 2017. We also advise Katsina to maximize its The 2017 budget is pegged at N140.2bn, with potentials by designing a workable plan that Recurrent expenditure projected at N47.7bn, or not only covers the exploration and extraction N3.975bn monthly—an amount that Katsina’s of the 34 solid minerals within, but also average total monthly revenue of N3.5bn foresees the building of a manufacturing base cannot cover. A coherent strategy on how best around the resulting commodities. to grow IGR is therefore vital, and more sustainable in the long-term.

Measures Katsina could take include tapping into cotton, one of its foremost tradable commodities. The State can rebuild its economy around the cotton business, and may aim for a yearly output of five million bales, to Measures Katsina could take include tapping corner a share of the estimated $12bn global into cotton, one of its foremost tradable market for cotton. Beyond the cultivation and commodities. The State can rebuild its production of seed cottons and lint, Katsina economy around the cotton business, and may also move into light manufacturing of may aim for a yearly output of five million cotton-based products. bales, to corner a share of the estimated $12bn global market for cotton. Beyond the With its large land mass and climate, Katsina is cultivation and production of seed cottons also strategically positioned to benefit from the and lint, Katsina may also move into light renewable energy market by serving its needs, manufacturing of cotton-based products. whilst making a dent in meeting demands at national level. Presently, the State has piloted a 10MW pilot wind farm project; augmenting this with solar electricity and ramping up wind- based electricity generation could leapfrog Katsina into becoming a manufacturing and renewable energy hub.

In the near term, these energy sources could be put to use to boost other areas of revenue; for instance, cattle ranches and farms could be irrigated using solar and wind energy, thereby ramping up livestock production and pushing back desert encroachment respectively.

State of States 45 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 64,609 34 47 1.4% N4.44bn (1000 birth) (1000 birth) N3.02bn N3.02bn Projected HIV Infant Under 5 HIV N2.58bn N2.98bn N2.64bn Prevalence N2.68bn Population Mortality Mortality 2014 Rate 2014 2014 2012

Kogi State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N52.57bn 2012 N3.19bn 2012 N20.26bn 2013 N58.80bn 2013 N5.02bn 2013 N12.53bn 2014 N54.82bn 2014 N6.57bn 2014 N16.78bn 2015 N40.42bn 2015 N6.78bn 2015 N48.67bn 2016 N31.81bn 2016 N9.57bn 2016 N81.17bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 20.72% Structure of State’s Revenue 2017 NET FAAC

Fish Cassava Rice 12,739,318.65tons (2015) 79.28%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.24bn N807.8m N/a N797.4M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.85bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.75bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N71.38bn (JAN-JUN 2017) Domestic N2.14bn* Debt AVERAGE MONTHLY OVERHEAD N4.89bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.89bn* $31.95m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N3.85bn* (2016) Shortfall -N1.04bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 4 6 OPPORTUNITIES Sustainability Rank Ease of Doing 17 Business 31 Days

Fish River Port Iron Ore Starting a KOGI STATE Business

Kogi State closed 2016 with a Domestic Debt The proposed Lokoja River Port could be one profile of N71.38bn, a rise from 2014 figures of way to strategically transform Kogi into the N10.3bn. This is a whopping 593% increase, and logical hub for Agriculture and agro-allied goods the reasons for the sharp growth in debt are likely coming in from northern Nigeria, as Kogi shares linked to consistent failure of Kogi to grow its borders with almost a dozen other States. This is internally-generated revenue (IGR) and rein in its critical because beyond rice, Kogi is renowned Recurrent expenditure, which appears to be for production of coffee, cocoa, palm oil, approaching unmanageable thresholds. cashews, groundnuts, maize, cassava, yam, rice and melon. With a good logistic base, the State Her fiscal framework continues to suggest Kogi could become net suppliers of these product into will be running a Recurrent surplus in financial neighbouring cities, and beyond. year 2017, which could further push it into debt. Kogi’s Overheads are projected to rise from 2016 Within, the National Iron Ore Mining Company budget estimates of N19.67bn to N25.7bn in 2017. (NIOMCO) is capable of providing employment opportunities to thousands and simultaneously Last year’s figures are crucial to grasping Kogi’s improving Kogi’s IGR. The Itakpe Hills holds current position; as at November 2016, Total significant amount of iron ore deposits, with Revenue was estimated at N54.956bn, compared production expected to top 10 million tons per to 2016 approved estimates of N63.13bn. Kogi’s annum, if Kogi can attract sustainable 2016 budget called for Recurrent expenditure investment. There is also the Ajaokuta Steel Mill, spending worth N56.28bn, while only N36.87bn and given its mineral and logistic potentials, Kogi was spent on Recurrent items as at the end of could well become a major steel belt in the region. November 2016. Given that the State’s wage-bill The State can also solidify current revenue as presented in the 2016 budget was N33.01bn, it streams gained from its significant limestone is clear that to some extent, Recurrent deposits, which have pushed cement production expenditure obligations were unmet in 2016, and towards 15 million tons per annum, by ensuring are being brought forward into 2017. more information is placed in the public domain about what Kogi draws as revenue from Amid an inability to resolve the pension and limestone as a commodity, and cement as a salaries of civil servants including university product. lecturers, Kogi’s actual IGR for 2016 remains unclear; the Nigerian Bureau of Statistics We are hard-pressed to note that Kogi’s estimates Kogi’s IGR at N9.57bn. aquacultural potential remains untapped. With With IGR standing at N797mn per month and careful planning, investment and best practices, average FAAC revenue for the first six months of fish production in ponds that draw water from 2017 at N2.82bn, Kogi’s estimated monthly Kogi’s rivers, could top one million tons. Globally, Recurrent expenditure obligations of N6.8bn approximately 42 million tons of fish is produced could prove difficult to surmount this year, without in fish farms, while commercial fishing vessels in reverting to borrowing, pooling funds from her the wild capture about 93.2million tons. Kogi is extra-budgetary allocation or drawing down on advised to replicate the mutual trade relationship savings. marketing strategy used to sell rice in Lagos, to service the needs of various markets on the Notably, this situation where the State continent. government’s IGR can barely cover its Recurrent Expenditure is happening despite the presence of the Ajaokuta mills and Dangote Cement factory, as well as huge limestone and iron ore deposits.

State of States 47 HEALTH INDICATORS

NET FAAC ALLOCATION 2017

36,515 29 39 1.4% N3.67bn (1000 birth) (1000 birth) N2.51bn N2.49bn N2.48bn Projected HIV Infant Under 5 HIV N2.16bn N2.23bn Prevalence N2.23bn Population Mortality Mortality 2014 Rate 2014 2014 2012

Kwara State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N46.35bn 2012 N11.32bn 2012 N36.89bn 2013 N50.05bn 2013 N13.84bn 2013 N29.73bn 2014 N44.39bn 2014 N12.46bn 2014 N31.69bn 2015 N34.05bn 2015 N7.18bn 2015 N42.03bn 2016 N25.81bn 2016 N17.25bn 2016 N53.14bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 36.15% Structure of State’s Revenue 2017 NET FAAC

Livestock Maize Sugarcane 57,443.75tons 63.85% (Poultry) (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.80bn N737.0m N/a N1.44bn*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N3.98bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N1.15bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N38.14bn (JAN-JUN 2017) Domestic N4.20bn* Debt AVERAGE MONTHLY OVERHEAD N5.36bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N5.36bn* $48.98m MONTHLY RECURRENT External EXPENDITURE Total average monthly revenue Debt COMMITMENTS

(JAN - JUN 2017) N3.98bn* (2016) Shortfall -N1.38bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 4 8 OPPORTUNITIES Sustainability Rank Ease of Doing 10 Business 30 Days

Feedmills Tomatoes Cement Starting a KWARA STATE Business

Kwara State’s budget projects a spending of all of which could help transform Kwara into N135.26bn in 2017, putting recurrent a major agro-based trading bloc. expenditure at N64.28bn and Capital expenditure at N70.9bn. As at December The State could simultaneously leverage its 2015, available figures reveal that Domestic landmass to become a major producer of debt stock stood at N31.96bn, while Foreign tomatoes, soybeans and maize. debt came to $51.03mn. In 2016 however, Foreign debt profile stood at $48.98, as Kwara seems to be cognizant of this, with a Domestic debt rose to N38.1bn. proposed tomato-processing factory. Should this become a reality, Kwara may become a Her FAAC Allocations averaged N2.35bn net producer of tomatoes, servicing the monthly between January and June 2017, major cities in the Southwest. Other crops with IGR noted as N17.25bn for 2016. With the that Kwara can competitively bring to market sum of N13.84bn projected for Personnel include cotton, kolanut, tobacco and costs and N33.4bn for Overhead costs, it is beniseed. evident that the projected IGR of N29bn for 2017, even if achieved, will not cover Kwara’s In the area of mining, Kwara will need to Recurrent expenditure. ensure its $300m cement factory comes onstream, on time; we advise joint ventures To its credit, Kwara State was able to with willing investors to drive exploration of persuade farmers from Zimbabwe to set up her abundant mineral resources, which farms, which now provide poultry, milk, include limestone, marble, feldspar, clay, processed cassava, soya bean, maize and kaolin, quartz and granite rocks. rice and ginger. Consequently, up to 3000 to 4000 people are employed during the harvesting season.

But the State will have to do more, if it wants to use agriculture to achieve financial stability. In this regard, Kwara has the With a rapidly expanding middle class advantage of being connected to most of its population and increasing demand for peers in the Southwest and Northwest via poultry products, soybeans and maize, rail. With a rapidly expanding middle class the State can become a major player in population and increasing demand for poultry the feed manufacturing sector. products, soybeans and maize, the State can become a major player in the feed manufacturing sector.

Careful planning and investment drives could see over 500,000 hectares come under grain cultivation. Investment must include provision for silos and elevators along the rail corridor,

State of States 4 9 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N8.52bn N7.07bn N6.74bn N6.76bn 196,839 25 34 2.2% N6.69bn N6.35bn N5.59bn (1000 birth) (1000 birth) Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Lagos State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N118.5bn 2012 N219.2bn 2012 N325.9bn 2013 N117.4bn 2013 N236.1bn 2013 N428.5bn 2014 N105.0bn 2014 N276.2bn 2014 N479.8bn 2015 N88.3bn 2015 N268.2bn 2015 N456.8bn 2016 N78.72bn 2016 N302.4bn 2016 N737.7bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 78.33% Structure of State’s Revenue 2017 NET FAAC

Fish Vegetables Livestock 548,246.23tons 21.67% (Poultry) (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N392.8m N6.38bn N98.4m N25.2bn

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated N32.18bn* (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N8.98bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N311.76bn (JAN-JUN 2017) Domestic N16.46bn* Debt AVERAGE MONTHLY OVERHEAD N25.44bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N25.44bn* $1.38m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N32.08bn* Shortfall (2016) N6.64bn (Good Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 5 0 OPPORTUNITIES Sustainability Rank Ease of Doing 2 Business 28 Days

Aquaculture Sea Port Housing Starting a LAGOS STATE Business

Lagos’s internally-generated revenue, when as investors continue to delve into Africa’s compared to many of its peers, is relatively high. telecommunication sectors. As no less than Her IGR as at the end of 2016 was N287bn, from eight companies currently have their undersea 2015 levels of N268.2bn. Previous audit reports cables running on Lagos waters, the State from the government show that IGR came to must deliver the requisite environment that N236.19bn and N276.16bn in 2013 and 2014 secures and sustains these high-caliber respectively. investments.

In 2017, the State is planning a Recurrent For instance, Lagos could tap into the growing expenditure spending of N305bn, or N25bn number of companies within the Yaba area to monthly. With its IGR not expected to grow create “Yabacon Valley,” a technology and significantly above N300bn, while its share of innovation cluster, that could be a major service revenue from FAAC in the first six months of point for the over 86 million Internet users in 2017 was N6.6bn, Lagos is expected to meet its Africa’s most populous nation. Significant Recurrent expenditure obligations. However, investment to connect offices and homes to amid the general backdrop of an economic Internet access, upgrading infrastructure downturn and recent recession, the State may around Yaba and developing new or existing choose to proactively reduce its Overheads. incubation centers should help accelerate this transformation. Notwithstanding, the general perception is that Lagos is a fiscal model for other States; even The State’s water body simultaneously holds though it bears mentioning that Lagos’ financial huge Aquaculture potentials. Epe and Badagry statements are notorious for being opaque, are just two of several regions that could containing scant useful information. become major aquacultural hubs and situate Lagos in a global industry which is projected by A priority for Lagos should be delivering on analysts to be worth $209.42bn by 2021. ongoing projects; we recommend Lagos adopts a smaller Recurrent budget size, Upon completion, the Badagry and Lekki ports diverting gains to close the infrastructure deficit could also make both localities major holding down its pace of economic manufacturing hubs, provided these are expansion.The State is still some way away complemented with efficient road and rail from achieving crucial schemes, including a networks, to enable the working population functional light rail system and working easily commute to and from the region. drainage system. The provision of road infrastructure and fire stations, as well as the Finally, with the federal government’s growing reduction of its housing deficit are some of the focus on the Lagos-Ibadan railways, Lagos can areas Lagos is still lagging behind in. loose some of its revenue (from taxing As a major economic center and the financial workers) to neighbouring States, given that hub of Nigeria, it is critical for Lagos to continue personal income tax should be paid to a to attract investment and talent. citizen’s State of residence, not where they work. One way out is for Lagos to deliver The State’s proximity to the Atlantic Ocean and decent, affordable housing in line with demand, its huge population make it the preferred as majority of her working population reside in destination to land undersea fiber optic cables, rented apartments.

State of States 51 HEALTH INDICATORS

NET FAAC ALLOCATION 2017

N3.88bn N2.67bn N2.65bn N2.64bn 106,195 77 123 8.1% N2.32bn N2.41bn N2.36bn (1000 birth) (1000 birth) Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Nasarawa State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N41.66bn 2012 N4.13bn 2012 N12.9bn 2013 N46.69bn 2013 N4.01bn 2013 N36.4bn 2014 N44.86bn 2014 N4.09bn 2014 N43.6bn 2015 N34.92bn 2015 N4.28bn 2015 N51.0bn 2016 N27.76bn 2016 N3.40bn 2016 N76.2bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 9.49% Structure of State’s Revenue 2017 NET FAAC

Maize Groundnut Rice 73,260.57tons (2015) 90.51%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.01BN N700.4M N/A N283.6M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N2.99bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N1.50bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N59.03bn (JAN-JUN 2017) Domestic N1.72bn* Debt AVERAGE MONTHLY OVERHEAD N3.22bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N3.22bn* $56.02m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue

(JAN - JUN 2017) N2.99bn* (2016) Shortfall -N0.23bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 52 OPPORTUNITIES Sustainability Rank Ease of Doing 24 Business 21 Days

Logistic Hub Aluminum Grains Starting a NASARAWA STATE Business

Nasarawa is a largely agrarian economy whose In terms of grain cultivation, Nasarawa could internally-generated revenue stood at N3.4bn make use of the Benue River to boost its as at the end of 2016; significantly down from agricultural potentials and diversify its current 2014 and 2015 figures of N4.1bn and N4.3bn crop portfolio. respectively. Her average share of FAAC revenue comes to N2.5bn; IGR is not expected Strategic mining is also crucial, as the State sits to grow significantly above N300m, as atop huge deposits of bauxite, a solid mineral Nasarawa has one of the lowest IGR numbers, commodity used to produce aluminum. only managing to make about N340.43mn per Nasarawa is best-placed to enter into joint- month. The State could therefore struggle to venture agreements to explore and mine this meet monthly Recurrent expenditure commodity. In the medium term to long term, obligations for 2017, which are estimated at the State could become a major producer of N3.22bn. aluminum roofing sheets, as well as other associated commodities. The State’s Domestic debt now stands at N59bn, 71% higher than the N34.5bn figures for 2014, the same year where External debt obligations amounted to $49.9mn.

To remain financially buoyant, Nasarawa may need to make significant cuts to its Recurrent expenditure budget, especially its Overheads, as well as aggressively increase IGR, with a Given its proximity to the capital Abuja, the focus on how to draw the middle class and real estate sector is booming within the business owners who commute to and from borders Nasarawa shares with the former. neighbouring Abuja into its Pay As You Earn By investing in housing, Nasarawa can also (PAYE) tax net. In this instance, Nasarawa profit from fashioning policies that will could draw on strategies utilised by Ogun State, exploit this rapid urbanisation for the good which continues to optimize tax collection rates of the public treasury, and ultimately the from workers who are employed in Lagos, but people. Any real estate cluster at Nasarawa’s live within Ogun’s boundaries. borders with Abuja must however be

Given its proximity to the capital Abuja, the real augmented with an efficient transportation estate sector is booming within the borders network. Nasarawa shares with the former. By investing in housing, Nasarawa can also profit from fashioning policies that will exploit this rapid urbanisation for the good of the public treasury, and ultimately the people. Any real estate cluster at Nasarawa’s borders with Abuja must however be augmented with an efficient transportation network.

State of States 53 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.77bn N3.21bn N3.25bn N3.19bn 75,401 31 41 1.2% N2.87bn N2.87bn (1000 birth) (1000 birth) N2.83bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Niger State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N56.83bn 2012 N3.78bn 2012 N22.5bn 2013 N61.59bn 2013 N4.12bn 2013 N29.8bn 2014 N53.10bn 2014 N5.75bn 2014 N31.6bn 2015 N40.13bn 2015 N5.98bn 2015 N30.3bn 2016 N32.13bn 2016 N5.89bn 2016 N45.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 12.98% Structure of State’s Revenue 2017 NET FAAC

Maize Fish Rice 51,149.80tons (2015) 87.02%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.42BN N865.3M N/A N490.1M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N3.78bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.44bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N31.98bn (JAN-JUN 2017) Domestic N1.56bn* Debt AVERAGE MONTHLY OVERHEAD N4.00bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.00bn* $45.35m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N3.78bn* (2016) (JAN - JUN 2017) Shortfall -N0.22bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 5 4 OPPORTUNITIES Sustainability Rank Ease of Doing 13 Business 32 Days

Uranium River Port Feedmills Starting a NIGER STATE Business

Named after the legendary River Niger and also known as ‘the Power State’ for being home to Whatever commodities Niger decides to turn two of Nigeria’s major hydroelectric power her hands to, the Baro River Port – if completed stations –the Kainji and Shiroro Dams– Niger – could become a major logistics hub for goods unfortunately seems to have little financial coming from Kebbi, Sokoto and Zamfara. power to keep its economy stable. The State is also on the Lagos-Kano rail Niger’s 2017 budget plans spending worth corridor, meaning the Baro Port could also N116bn; Recurrent expenditure was pegged at service Kaduna, Kano and Katsina. As a N48bn or N4bn monthly, and N67bn cited for uranium exporter since the 1960s, Niger State Capital expenditure. However, the State’s IGR may also choose to ramp up and sustain averaged N490mn in 2016; the average wage investment into the sector. bill stands at N2.48bn (Jan-June 2016), while its total average monthly revenue amounts to N3.196bn (2016). If these figures maintain their current trend, Niger will likely have very little revenue left to carry out capital projects.

With a decrease in its average FAAC revenue from N3.27bn in 2016 to N3.03bn (January- June) in 2017, Niger’s Domestic and External The State could leverage its land and water debt profile as at December 2016 stands at a resources to remake itself as a leading sizeable N31.98bn and $45.35mn respectively. grain producer in Africa, harnessing these The State’s debts may consistently increase to increase agricultural production focused over the foreseeable future, as she is currently on the food, biofuel and feed industries, as struggling to pay workers salaries. well as tapping into its hydroelectric and

wind power credentials, to accelerate Niger must begin to look inwards to make, and enhance financial progress. industrialisation within and outside of its borders. The State could leverage its land and water resources to remake itself as a leading grain producer in Africa, harnessing these to increase agricultural production focused on the food, biofuel and feed industries, as well as tapping into its hydroelectric and wind power credentials, to accelerate industrialisation within and outside of its borders.

Also, Niger’s geological location endows it with abundant mineral resources. Rich commercial deposits of talc, gold, silica, marble, iron, feldspar, lead and limestone could be used for domestic and export purposes.

State of States 55 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N3.12bn 69,399 43 63 0.6% (1000 birth) (1000 birth) N1.91bn N1.87bn N1.88bn N1.63bn Infant Under 5 HIV N1.53bn N1.59bn Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Ogun State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N52.84bn 2012 N12.44bn 2012 N61.66bn 2013 N56.82bn 2013 N13.78bn 2013 N77.02bn 2014 N48.94bn 2014 N62.23bn** 2014 N89.95bn 2015 N34.33bn 2015 N64.34bn** 2015 N96.31bn 2016 N20.07bn 2016 N72.98bn 2016 / N166.96bn ** Ogun State 2015 Audited Financial Statement

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 75.90% Structure of State’s Revenue 2017 NET FAAC Timber Cassava Maize 16,376,547.50tons (2015) 24.10%

IGR AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.06BN N870.5M N/A N6.08bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated N8.01bn* (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N5.23bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N75.92bn (JAN-JUN 2017) Domestic N3.27bn* Debt AVERAGE MONTHLY OVERHEAD N8.50bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N8.50bn* $103.42m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS (JAN - JUN 2017) N8.01bn* (2016) Shortfall -N-0.49bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 5 6 OPPORTUNITIES Sustainability Rank Ease of Doing 3 Business 32 Days OGUN STATE Housing Manufacturing Education Starting a Hub Business

Under the present administration, investment Olokola Free Trade Zone, if speedily executed, drives have maintained and attracted some 100 could become an industrial enclave, while a industries to Ogun State in the last two years. deep-sea port could propel the Gateway State This is reflected in the State’s IGR, which more several notches up the fiscal ladder. than grew from N64.3bn in 2015, to N73bn in 2016. Nonetheless, Ogun’s debt is assuming Known for its poultry farming, Ogun must proportions that should worry the custodians of capitalize on its connection to Kwara and Niger its purse strings. With a fairly weak Naira and an by rail and road, to transform itself as a net External debt overhang of $103.4mn as at supplier of poultry products to the Southwest December 2016, coupled with an increase in and North-central markets. There is also the Domestic debt from N70.19bn in 2014 to option to directly enter into agreements N76.92bn in 2015, servicing Ogun’s debt between the Nigerian Railway Corporation and obligations could create a big dent in the interested private sector stakeholders, to State’s coffers. procure railcars that ease the transport of goods, individuals and services, which will Ogun’s budget for 2017 is N221bn; Recurrent reflect positively on Ogun’s books. expenditure, which includes Personnel costs and Overheads, is projected at N102bn or Being home to almost 30 tertiary institutions is N8.5bn monthly. This is a 14% increase from one reason for Ogun to strategically work 2016 Recurrent expenditure budgets pegged at towards becoming a knowledge hub; the State N89.91bn. For capital projects, the 2016 budget stands to benefit from the economic impact allotted the sum of N99.29bn; for 2017, Capital students in such institutions will bring to the expenditure will amount to N118bn. local economy. Ogun may however need to invest more on security and encourage schools Ogun must find a middle ground between to expand, as the Nigerian university system Expenditure versus IGR, and improve its tax can only take in about 500,000 candidates per collection efforts. The most obvious opportunity year, despite figures showing that 1.7million here lies in the fact that about 36.7% of people sought admission into tertiary households reside in rented apartments, institutions nationwide in 2017. according to 2013 figures from the National Bureau of Statistics (NBS). Ogun State could As a big player in cement production – with decide to develop an affordable housing policy output approaching 20 million tons, Ogun State to draw in residents, especially those working in is also known for its granite. Commodities such Lagos, and could make additional revenue from as these should be exploited, especially as the land sales and development. The State should State continues to attract companies seeking b e l o o k i n g a t e a s i n g p a t h w a y s t o larger operational bases that are situated near homeownership, including formalising the Lagos. sector via mortgage schemes in the short term, thereby making homes affordable – especially Ogun is rapidly industrializing, and will for citizens who work in Lagos but live within therefore need to upgrade infrastructure in its Ogun’s borders. industrial parks and ease policies around doing businesses in such parks, if it hopes to The State should explore policies that would continue to attract the big factories, and by revamp its lagging agricultural sector. The extension, bigger revenues.

State of States 57 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.46bn N3.81bn 49,281 42 61 4.3% N3.69bn N3.48bn (1000 birth) (1000 birth) N3.31bn Infant Under 5 HIV N3.15bn N3.27bn Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Ondo State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N73.18bn 2012 N10.15bn 2012 N44.6bn 2013 N81.19bn 2013 N10.49bn 2013 N39.2bn 2014 N66.48bn 2014 N11.72bn 2014 N28.8bn 2015 N41.61bn 2015 N11.09bn 2015 N36.9bn 2016 N34.55bn 2016 N8.68bn 2016 N68.3bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 13.20% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cocoyam Cocoa 776,408.830tons 86.80% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.67BN N821.8M n1.13bn N723.7m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N4.35bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N4.50bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N53.16bn (JAN-JUN 2017) Domestic N3.43bn* Debt AVERAGE MONTHLY OVERHEAD N7.93bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N7.93bn* $49.53m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS (JAN - JUN 2017) N4.35bn* (2016) Shortfall -N3.58bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 5 8 OPPORTUNITIES Sustainability Rank Ease of Doing 25 Business 40 Days

Cocoa Deep Sea Port Bitumen Starting a ONDO STATE Business

Amidst the economic downtown, Ondo’s sustenance, away from the federal budget has increased significantly, from government’s statutory allocations. N123.72bn in 2016 to N169.7bn in 2017. The State could target delivery of 50,000 tons of quality cocoa annually, which should create In 2016, the State expended an average of jobs and kick-start its economic resuscitation. N5.67bn monthly on Recurrent expenditure, Ondo may also seek to extend its markets to N3.14bn on Personnel costs and N2.53bn on the over 125 factories in China that use cocoa Overhead costs – while it only raked in a total for industrial feedstock. average of N4.01bn as monthly revenue. These Ondo would benefit from coming up with new revenue figures suggest that Ondo can barely fiscal strategies that look further afield, cover her Recurrent expenses. including investing in its bitumen industry, The trend seems to be replicated for this fiscal deciding how best to diversify its crude oil year; the State has not yet been able to revenue base and laying infrastructure that conveniently close the large variance between boosts inter-state trade. With bitumen, Ondo revenue and expenditure. could become a major roofing hub for the West African market, as well as selling to road A wide gap seems to exist between the amount construction companies; all of which may be projected for Ondo’s Recurrent expenditure achieved via a joint-venture system with (N111.7bn, or N9.31bn monthly) and that for potential investors. Capital expenditure (N58bn, or N4.83bn monthly). With only N4.04bn projected as Total Ondo’s access to trade markets will be largely monthly revenue, Ondo’s ability to pay up all her boosted if its plans with the Ogun State expenses, will likely be fraught with challenges. government to develop a deep-sea port and free-trade zone around Olokola (in the Ondo may have to resort to borrowing; its coastline areas between both States) become Domestic debt in 2015 was N26.65bn, which a reality. The project is meant to serve as an oil doubled to N53.16bn in 2016. With External debt, and gas logistics base as well as an export- the State borrowed $50.2m in 2015 and processing zone. Ondo is advised to pursue $49.53m in 2016; these figures are notably the this project as it will help create seamless lowest among all of Nigeria’s Southwestern transportation of her processed resources and States. reduce the pressure on the two functional free trade zones (Onne and Calabar). An added In general, there has been a drop in Ondo’s IGR advantage is that this scheme could see Ondo from N10.1bn in 2015, to N8.68bn in 2016. With emerge a major logistic base in the West, only an average of N3.31bn allocated to the alongside the Lagos free-trade zone. State from the federal purse so far this year, Ondo needs to save its economy by tapping into its agricultural products, especially cocoa. Ondo, Osun and Ekiti States are historically known for commercial cocoa production, being the powerhouse of the South West economy in the early 60s of Nigeria; revitalizing the cocoa industry will mean Ondo is tangibly doing everything in her power to reach self-

State of States 5 9 HEALTH INDICATORS

48,689 39 55 2.6% NET FAAC ALLOCATION 2017 (1000 birth) (1000 birth) Infant Under 5 HIV N1.79bn Projected HIV Prevalence N0.60bn N0.35bn N0.56bn N0.31bn N0.58bn Population Mortality Mortality N0.24bn 2014 Rate 2014 2014 2012

Osun State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N48.08bn 2012 N5.02bn 2012 N48.3bn 2013 N46.08bn 2013 N7.28bn 2013 N51.2bn 2014 N35.99bn 2014 N8.51bn 2014 N51.2bn 2015 N20.22bn 2015 N8.07bn 2015 / N159.9bn 2016 N5.91bn 2016 N8.88bn 2016 / N168.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 53.91% Structure of State’s Revenue 2017 NET FAAC

Cocoa Cassava Yam 117,843.89tons 46.09% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) -N183.1BN N816.0M n/a N740.4m*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N1.37bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.78bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N147.1bn (JAN-JUN 2017) Domestic N3.54bn* Debt AVERAGE MONTHLY OVERHEAD N6.32bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N6.32bn* $70.53m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N1.37bn* (2016) Shortfall -N4.94bn-N4.94bn (Bad(Bad Indicator) Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 6 0 OPPORTUNITIES Sustainability Rank Ease of Doing 36 Business 37 Days

Food Hub Cocoa Red Bricks Starting a OSUN STATE Business

Osun’s books appear to be in the red, as it has This indicates that Osun’s planning model increased its Domestic and External debt stock should take a realistic view of the gulf between markedly, amid news reports that detail its its Revenue and Expenditure, and find ways to financial struggle to meet wage and pension bridge this gulf. bills. One way for Osun to boost earnings in the near External debt reduced from $76.9mn in 2015 to term is to follow through with the $70.5mn in 2016, but the picture is different with Memorandum of Understanding it has with the Domestic debt, which rose from N37.82bn in International Institute of Tropical Agriculture 2014 to N144.69bn in 2015, resting at N147bn in (IITA), Ibadan, to boost cocoa production. If the 2016. This situates Osun as the State with the policy is sustained and Osun could second-highest debt exposure for its peers aggressively promote her cocoa yield, within the South-West region. production could top 40,000 tons.

Simultaneously, Osun’s statutory allocations Osun’s proximity to the major cities in reduced during this period, following southwest Nigeria—including Lagos, Ibadan deductions of up to N2.39bn in 2016; these and Abeokuta via rail—could potentially make deduction arrangements might linger until the State a major food hub sending cassava, Osun’s debt runs out in 2018. yams, vegetables and other produces throughout the region. A marketing board The State’s inability to meet its obligations to system, complemented by a marketing civil servants gave rise to FAAC allocations of strategy (similar to what Kebbi and Lagos did N833.91m in the first quarter of 2017, and regarding the Lake Rice initiative), could be N12.63bn worth of bailouts in form of Paris club adopted. refunds. Despite these efforts, Osun is cited in news reports as having paid its workers only Non-edible revenue streams Osun may half of their salaries since 2015. explore are its gold and clay deposits. Whatever route the State chooses, there is a Bright spots however exist; Osun has need to improve and kick-start the relevant commissioned model schools in places infrastructure that can definitively revamp her including Osogbo, Iyoye Ijesa and Ede, as well revenue base and take her books out of their as built the 30km Gbongan-Akoda Road, the current precarious position. Adebisi Akande Trumpet Interchange Bridge, and rehabilitated the 30.20km Gbongan-Iwo- Oyo Road. Bright spots however exist; Osun has commissioned model schools in places For 2017, Osun plans a budget of N138.2bn, with including Osogbo, Iyoye Ijesa and Ede, as N75.8bn going into Recurrent expenses and well as built the 30km Gbongan-Akoda N63bn delineated for Capital expenditure. We Road, the Adebisi Akande Trumpet note that since the State’s average monthly Interchange Bridge, and rehabilitated the revenue is projected at N1.09bn, while she 30.20km Gbongan-Iwo-Oyo Road. expects to spend about N6.32bn every month, there is a sizeable deficit of N5.23bn per month.

State of States 61 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.97bn N3.48bn N3.28bn 172,980 30 39 5.6% N3.21bn N3.13bn (1000 birth) (1000 birth) N2.82bn N2.87bn Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Oyo State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N62.45bn 2012 N14.59bn 2012 N23.7bn 2013 N67.14bn 2013 N15.25bn 2013 N31.9bn 2014 N57.42bn 2014 N16.31bn 2014 N26.0bn 2015 N42.99bn 2015 N15.66bn 2015 N60.6bn 2016 N33.54bn 2016 N18.88bn 2016 / N137.9bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 31.69% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Cassava Cashew Nut 993,912.35tons (2015) 68.32%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.08BN N1.31bn n/a N1.57bn*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N4.97bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N4.67bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N115.9bn (JAN-JUN 2017) Domestic N5.96bn* Debt AVERAGE MONTHLY OVERHEAD N10.63bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) $71.91m MONTHLY RECURRENT N10.63bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue (JAN - JUN 2017) N4.97bn* (2016) Shortfall -N5.66bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 62 OPPORTUNITIES Sustainability Rank Ease of Doing 30 Business 31 Days

Hydro-Power Fishing Feedmills Starting a OYO STATE Business

Oyo has tagged its 2017 spending plan the In the area of internally generated revenue, “Budget of Self Reliance,” presumably with there is scant comfort from this year’s budget. hopes of being less dependent on federal Oyo’s government has an IGR target of allocations. This budget totals the sum of N107.23bn, a figure we will term unrealistic, N209bn (a 20% increase from 2016’s budget of based on the fact that IGR realised in 2015 was N173.77bn), with Recurrent expenditure put at N13.7bn; while N16.6bn was generated in 2016. N128bn – almost double the 2015 figure of Interestingly, indications are that Oyo intends N65.4bn. to target its informal sector to generate this revenue, which has a workforce of 2.38million The paradox here is that spending 61% of the workers. entire budget on Recurrent expenditure does not suggest leanings towards self-reliance, A flat tax of N1000 per worker across the board particularly when, on closer examination, it should return larger IGR figures, provided appears that only N81bn has been earmarked proceeds are justified by being ploughed for Capital expenditure. Of this figure, just directly into developmental projects, with N15bn is to be expended on new and ongoing holistic accountability. road construction, while the educational sector is expected to take N4.8bn for the rehabilitation We advise that Oyo revamps existing revenue of schools. streams, rather than embark on more expensive, new ones. The Ikere Gorge Dam, Trends show the State’s IGR fluctuates; in 2014 which can potentially generate over 3750MW it was N16.30bn but dropped to N15.66bn in of hydroelectricity and irrigate up to 12,000 2015, and later increased in 2016 to N18.88bn, hectares of farmland, remains abandoned. with an average monthly figure of N1.57bn. Getting the dam functional, could effectively give Oyo a seat at the table of major power While FAAC allocations as at 2016 made up hubs in Nigeria; the Dam simultaneously holds 65.4% of Oyo’s revenue, as at June 2017 the the likelihood of significant revenue from State has had about N18.8bn allocated from the aquaculture. Federal purse, with average monthly allocations pegged at N3.13bn. In turn, the 12,000 hectares of land, which draws water from the Ikere dam, could be put Given that Oyo foresees average monthly to use as a rice paddy, with crop yield servicing Recurrent expenditure worth N10.63bn and the Lagos market, and beyond. Abundant land expects monthly revenue to come to an in the Oke Ogun area could also be utilized for average of N4.2bn, the State’s ability to meet its the cultivation of various grains, provided these monthly recurrent expenditure commitments measures are complemented by transportation will likely fall short of about N6bn. and storage infrastructure, to increase revenue accruing to Oyo State. These gaps are perhaps a pointer to why Domestic debt has almost tripled in just one year, from N47.3bn in 2015 to N115.89bn in 2016; Oyo’s External debt has also risen to $71.91mn in 2016, from $66.75mn in 2015.

State of States 63 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N3.54bn

81,701 54 81 2.3% N2.16bn N2.16bn N2.16bn (1000 birth) (1000 birth) N1.68bn N1.86bn N1.82bn Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Plateau State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N52.16bn 2012 N6.93bn 2012 N27.5bn 2013 N56.86bn 2013 N8.49bn 2013 N56.0bn 2014 N52.86bn 2014 N8.28bn 2014 N84.0bn 2015 N33.75bn 2015 N6.94bn 2015 N102.2bn 2016 N20.69bn 2016 N9.19bn 2016 N119.3bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 25.84% Structure of State’s Revenue 2017 NET FAAC

Potatoes Maize Groundnut 110,795.18tons (2015) 74.16%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.39BN N812.8m n/a N765.9m*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N2.96bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N2.03bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N110.3bn (JAN-JUN 2017) Domestic N3.75bn* Debt AVERAGE MONTHLY OVERHEAD N5.78bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N5.78bn* $29.14m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N2.96bn* (2016) (JAN - JUN 2017) Shortfall -N2.82bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 6 4 OPPORTUNITIES Sustainability Rank Ease of Doing 33 Business 34 Days PLATEAU STATE Tourism Industrial Potato Starting a Starch Business

In 2016, Plateau’s average monthly Revenue processing plants will be needed, to cut down stood at N3.05bn, while its monthly Recurrent on wastage. expenditure was N6.25bn, leaving a deficit of N3.201bn. Though its Domestic debt stock rose One development worth watching which may from N96.20bn in 2015 to N110.34, we note that yet boost Plateau’s industrialisation Plateau’s Foreign debt stock dropped from credentials and its revenue base is the ongoing $30.47mn in 2015 to $29.14mn in 2016. 700-hectare potato project, which lies across Kwaal and Gyel communities. Projected to Plateau’s 2017 budget has been put at ensure Jos makes Nigeria emerge as West N139.49bn; coming from N146.7bn in 2016, this Africa’s largest potato producer in the nearest is a slight 4.91% drop. Even though the budget future, this project is expected to result in the size decreased this year, it is one still heavily production of 100 tonnes of the staple per day. characterised by high Recurrent expenditure commitments of N69.36bn; an overwhelming Plateau’s unique weather is not just suited to 49.72% of the entire budget. agriculture; places like the Jos wildlife Safari Park, Zoological Gardens and Asop Falls will Capital expenditure has been put at N70.13bn, likely appeal to a wider range of tourists across reportedly to allow the State complete projects the globe, throughout the year. For this to already initiated from the previous government. happen, the security situation in the State will Under Capital expenditure, N18.56bn has been have to improve markedly. allocated to the Works and Transport sector, while Agriculture received N6.107bn, representing 8.71% of all capital expenditure. As FAAC allocations over the first six months of 2017 was N11.8bn, Plateau’s internally One development worth watching which may generated revenue drive will have to make yet boost Plateau’s industrialisation above 2016 figures of N9.19bn, to keep the state credentials and its revenue base is the ongoing afloat. 700-hectare potato project, which lies across Kwaal and Gyel communities. Projected to One way to achieve this is the State’s economic ensure Jos makes Nigeria emerge as West mainstay – agriculture. Africa’s largest potato producer in the nearest future, this project is expected to result in Plateau has a very unique climate and the production of 100 tonnes of the staple favourable soil that are both suitable for per day. growing some exotic crops, vegetables and fruits, including Irish potatoes, strawberry, beetroot, celery, broccoli and blackcurrants. These fruits and vegetables are not grown in any other part of the country, placing the State in pole position to become a hub for food exports in Africa. To achieve this, Plateau would need to place more land under cultivation, and augment this with a sterling transportation plan, while greater investment in the Irish potato

State of States 65 HEALTH INDICATORS NET FAAC ALLOCATION 2017 N10.61bn N9.61bn N9.45bn N9.30bn N8.64bn N8.58bn N7.92bn 121,351 45 65 15.2% (1000 birth) (1000 birth) Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Rivers State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 / N226.5bn 2012 N66.3bn 2012 N87.2bn 2013 / N246.4bn 2013 N87.9bn 2013 N136.4bn 2014 N184.1bn 2014 N89.1bn 2014 N99.9bn 2015 N105.2bn 2015 N82.1bn 2015 N144.2bn 2016 N81.9bn 2016 N85.3bn 2016 N157.2bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 33.79% Structure of State’s Revenue 2017 NET FAAC

Oil Palm Fish Raffia Palm 44,600.84tons (2015) 66.21%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.87BN N1.52bn N4.77bn N7.10bn*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N16.27bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N AVERAGE MONTHLY N5.17bn* AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N142.4bn (JAN-JUN 2017) Domestic N6.58bn* Debt AVERAGE MONTHLY OVERHEAD N11.75bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) N11.75bn* $48.26m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N16.27bn* (2016) (JAN - JUN 2017) N4.52bn (Good Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 6 6 OPPORTUNITIES Sustainability Rank Ease of Doing 1 Business 35 Days RIVERS STATE Oil Palm Manufacturing Petro-Chemicals Starting a Hub Business

The sixth most-populous State, Rivers State is N7.1bn, it can be deduced that while Rivers will also one of Nigeria’s richest, in terms of crude likely meet its Recurrent expenditure oil deposits; she remains at the epicenter of obligations which come in at N11.75bn, it may Nigeria’s oil industry. This position comes with a struggle to fund its expansive Capital significant share of annual FAAC allocations, expenditure plans pegged at N329bn, without as well as debt – External and Internal debt the aid of donor funds or some form of figures stand at N142.2bn and $48.2bn. domestic and/or foreign borrowing.

The State’s 2017 spending plan, nicknamed the To keep revenue entering its coffers, Rivers “Golden Jubilee” budget, is a proposed sum of State can also choose to tap into its various N470bn – a significant 53.1% increase from the agricultural, aquaculture and tourism 2016 budget of N307bn. Accordingly, annual resources; its coastlines and access to the Recurrent expenditure for 2017 is projected at Atlantic Ocean open up opportunities for a N141bn; a steep increase from the budgeted thriving aquaculture industry. The government Recurrent expenditure of N120bn from 2016. will however have to formally support artisanal fishermen in the riverine areas, to tangibly These increases have been criticized as transform Rivers’ agriculture economy from neglecting to take into account Nigeria’s subsistence to industrial levels. recession. Our view is however more fact- based; Rivers’ internally generated revenue Blessed with an upland area of 760,000 arable may not remain trending upwards, due to hectares, Rivers is a leader among its peers in increased criminal activities such as the production of palm oil, yam, rice and beans. kidnapping, robbery and piracy, as well as the The State could build a vibrant manufacturing- threat of Shell Petroleum Development export industry based around that sector if it Company withdrawing its activities by engages speedily with the Federal relocating its headquarters and operational Government to expand activities at the Rivers base away from Port Harcourt. Port Complex, thereby generating more income. Rivers receives a monthly average of N9bn in FAAC revenue. In addition to this, its Governor This could be augmented with a full overhaul of claims that a total of N17bn (and not N34bn) processes to do with the assessment, was released to Rivers from the Paris Club exploitation and management of its funds. While it desires to generate revenue of hydrocarbon potentials. We advise that Rivers N168.8bn internally, in the years 2015 and 2016, becomes hands-on with the scheduled oil spill Rivers’ IGR was approximately N82.1bn and clean-up; aggressively mediates in the N85.2bn respectively. It is therefore unclear resolution of all existing crises which affect its how the Rivers State Government intends to crude earnings and proactively prevents achieve a 98.1% increase in 2017, to support its further environmental degradation and ambitious budget projections. mismanagement of the oil wealth it holds in trust for the people. At approximately N9bn (based of the first six months of 2017), allocations from FAAC are significantly lower than FAAC receipts in 2014. Adding the monthly IGR uptake estimate of

State of States 67 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.63bn N3.28bn N3.25bn N3.16bn 113,051 21 26 6.4% N2.84bn N2.96bn N2.92bn (1000 birth) (1000 birth) Infant Under 5 HIV Projected HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Sokoto State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N54.8bn 2012 N4.31bn 2012 N9.48bn 2013 N60.7bn 2013 N5.51bn 2013 N12.78bn 2014 N56.1bn 2014 N5.62bn 2014 N15.77bn 2015 N43.2bn 2015 N6.22bn 2015 N19.93bn 2016 N34.3bn 2016 N4.55bn 2016 N34.64bn

TOP AGRICULTURAL PRODUCTS IGR SOLID MINERAL PRODUCTION 10.33% Structure of State’s Revenue 2017 NET FAAC

Onions Livestock Cowpea 627,317.00tons (Cattle) (2015) 89.67%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.45BN N835.8M N/A N378.8M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.67bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N1.87bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N22.5bn (JAN-JUN 2017) Domestic N3.41bn* Debt AVERAGE MONTHLY OVERHEAD N5.28bn* COST (JAN-JUN 2017)

Monthly commitments ABILITY TO MEET (Recurrent expenditure) $39.8m MONTHLY RECURRENT N5.28bn* External EXPENDITURE Debt COMMITMENTS Total average monthly revenue

(JAN - JUN 2017) N3.67bn* (2016) Shortfall -N1.61bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 6 8 OPPORTUNITIES Sustainability Rank Ease of Doing 29 Business 30 Days SOKOTO STATE Gypsum Cement Hydro-Electricity Starting a Dry Wall Business

Though often cited as one of the poorer States The flood plains of the Sokoto Rima River are within Nigeria, Sokoto is also celebrated as one rich in grainy soil which is suitable for of the few that does not owe salaries due to its commercial production of climate-suited crops civil servants. To lift itself out from poverty, including sugar cane, garlic and onions. Sokoto State has made efforts to cut costs, whilst kicking off a number of social As home to Goronyo Dam, one of the largest intervention programmes covering health, dams in Nigeria, as well as the Shagari and education, agriculture and job creation. Notably, Lugu dams, Sokoto should ensure these almost a third of (27.3%) of the 2017 budget is resources are operating at their fullest being allocated to the education sector, capacity, providing hydropower needed for showing Sokoto’s focus on reversing its status irrigation farming, and water supply on an as an educationally disadvantaged State. industrial scale. Particularly encouraging is Sokoto’s partnership with the World Bank on Only 31% of Sokoto’s signed 2017 budget of the implementation of the Nigeria Erosion and N204.3bn (which is about N29.9bn above the Watershed Management Project, which entails 2016 budget of N174.3bn), has been dedicated the rehabilitation and construction of earth to its Recurrent expenditure. The 2017 dams in the State. Recurrent expenditure costs of N42.9bn are a slight reduction from the 2016 budget’s Sokoto has one of the largest limestone Recurrent expenditure of N50.5bn; this is reserves in Africa, as well as substantial possibly the result of a recent expunging of deposits of gypsum - which is essential ghost workers. feedstock for industrial cement production. The State seems to have taken the hint, with However, a closer look at Sokoto’s books is reports of a new cement manufacturing firm called for. Its IGR for 2015 and 2016 was being built via Public Private Partnership in approximately N6.22bn and N4.54bn Kware local government area. In addition, respectively, with an average annual IGR of available reports note that Sokoto State has N5.3bn for 2017, resulting in monthly income also entered into another set of arrangements from IGR pegged at N448.7mn. If the average with the World Bank, to access $6mn to monthly FAAC revenue receipts which come to support mining activities within its borders. N3.07bn are added to average monthly IGR income, it becomes unclear how the State Finally, for a State where over 80% of its government intends to support its budget inhabitants rely on farming, Sokoto should projections of N17.025bn monthly. Most explore its agricultural potentials, creating damning is the fact that despite these grazing reserves and ranches to enhance shortfalls, Sokoto recently spent N100mn cattle production figures, as well as developing sponsoring 90 clerics to a pilgrimage. socially-inclusive ways to tax the 1.05 million workers employed in its informal sectors. We advise Sokoto to look inwards for lasting financial security; already a State whose economy is predominantly agro-allied, capital investments around its agricultural sector should be encouraged.

State of States 6 9 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N3.79bn N2.53bn N2.49bn N2.50bn 107.402 35 48 10.5% N2.15bn N2.23bn N2.21bn (1000 birth) (1000 birth) Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Taraba State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N52.3bn 2012 N3.42bn 2012 N20.3bn 2013 N55.9bn 2013 N3.34bn 2013 N17.6bn 2014 N48.9bn 2014 N3.79bn 2014 N18.5bn 2015 N36.7bn 2015 N4.16bn 2015 N32.1bn 2016 N27.4bn 2016 N5.89bn 2016 N45.6bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 16.11% Structure of State’s Revenue 2017 NET FAAC

Maize Sorghum Rice 64,780.39tons 83.89% (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.82BN N735.5M N/A N491.3M*

Average Average Average Monthly Monthly Average Monthly Statutory Monthly VAT Internally 13% Share Of Generated N3.05bn* Allocation (Jan-Jun 2017) Derivation Revenue (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.04bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N38.9bn (JAN-JUN 2017) Domestic N2.07bn* Debt AVERAGE MONTHLY OVERHEAD N4.11bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N4.11bn* $21.9m MONTHLY RECURRENT External EXPENDITURE Debt COMMITMENTS Total average monthly revenue

(JAN - JUN 2017) N3.05bn* (2016) Shortfall -N1.06bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 70 OPPORTUNITIES Sustainability Rank Ease of Doing 21 Business 35 Days

Hydro Power Vegetables Tourism Starting a TARABA STATE Business

Ranked among Nigeria’s agriculturally rich Government FAAC allocations, resulting in an States, Taraba is unfortunately plagued by the average receipt of N2.35bn per month. menace of tribal herdsmen, who are accused of killing and maiming hundreds of people, It is not all doom and gloom, as Taraba is including farmers. Taraba’s economy has also making monthly savings of N500mn, after been affected in part by a resurgence of successfully weeding out ghost workers. In terrorist groups who are reported as escaping addition, Taraba has resuscitated a number of from the Sambisa Forest in Borno, towards its moribund State-owned firms, including the Suntai Daaji forests. Mambilla Beverages Company, Taraba Sugar Company, Baisa Timber Company and the Taraba has proposed a 2017 budget of Taraba Cassava Processing Company. The N110.2bn; a modest 10% increase from its 2016 State is also looking to develop its rich mineral budget of 100bn. With an approximately 45% to resources, obtaining licenses for small-scale 55% split between Recurrent and Capital mining for the Taraba Solid Minerals expenditures in the 2017 budget, the State Development Company and acquiring 14 lease intends to spend N49.3bn for the year, and Exclusive Prospecting License (EPL), to N4.1bn per month on its recurrent expenditure commence joint-venture exploration, in obligations. partnership with other companies.

However, with an average monthly IGR of As Taraba chooses to diversify its sources of N418.77mn plus FAAC allocations of N2.34bn, revenue, we make a case for transparency and Taraba state receives a monthly income of sustainability of the N2bn Green House approximately N2.75bn, which is only about half project, which has daily production estimates of its Recurrent expenditure alone. of five tonnes of cucumber, pepper, lettuce and tomatoes, mainly because this will generate With this situation, if Taraba is unable to meet employment and facilitate technology transfer its Recurrent expenditure needs, it will to the State university and College of undoubtedly be unable to finance its Capital Agriculture, which are both in Jalingo. expenditure projects. This shortfall is likely already being manifested; the State has not Energy generation could also hold a lot of paid its workers, particularly pensioners. To promise for Taraba’s economic prosperity. The reconcile this deficit, Taraba may have to proposed Mambilla Dam, with a reservoir at undertake further borrowing. Currently, 1,300 metres (4,300 ft) above sea level, will Domestic debt stands at N38.8bn, with $21.9mn meet power needs, as well as boost fresh water for Foreign debts. We note however that fishing and farming. increasing debt servicing costs and tenure Hydropower could also transform the State could place additional constraints on a fiscally into a major player in rice production, weak State. particularly when augmented with investments in milling infrastructure such as plants, silos Taraba’s monthly revenue is made up of its and elevators. Taraba may also leverage monthly FAAC allocations and IGR. For the potential and existing river and rail networks to months of January, February, March and April, facilitate greater access to markets for its Taraba State received the sums of N2.15bn, goods. N2.52bn, N2.23bn and N2.48 from the Federal

State of States 71 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 N4.31bn N3.01bn N2.71bn 59.922 N2.98bn N2.67bn 72 113 5.3% N2.61bn N2.28bn (1000 birth) (1000 birth) Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Yobe State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N51.2bn 2012 N1.79bn 2012 N8.87bn 2013 N56.2bn 2013 N3.07bn 2013 N6.39bn 2014 N50.8bn 2014 N3.07bn 2014 N7.21bn 2015 N39.0bn 2015 N2.25bn 2015 N9.88bn 2016 N31.2bn 2016 N3.24bn 2016 N22.32bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 8.16% Structure of State’s Revenue 2017 NET FAAC

Groundnut Cowpea Millet 883.08tons (2015) 91.84%

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N2.31BN N733.1M N/A N270.0M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N3.31bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

AVERAGE MONTHLY N N1.68bn* RECURRENT EXPENDITURE AVERAGE MONTHLY PERSONNEL (JAN-JUN 2017) COST (JAN-JUN 2017) N13.6bn Domestic N1.81bn* Debt N3.49bn* AVERAGE MONTHLY OVERHEAD COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N3.49bn* $28.5m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N3.31bn* (JAN - JUN 2017) (2016) Shortfall -N0.18bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 72 OPPORTUNITIES Sustainability Rank Ease of Doing 18 Business 34 Days

Cement Diatomite Livestock Starting a YOBE STATE Business

Yobe State unfortunately has the added careful planning and further investment on challenge of insecurity, brought on by the Boko security, the State could attain self-reliance in Haram insurgency. the economic sense.

Unsurprisingly, the State is now ensconced in For solid minerals, Yobe has 247 million tons of the league of debtors, seeing its Domestic debt proven limestone deposits, 1.9million tons of stock markedly increase, from N3.86bn in 2015 kaolin and 141 million tons of gypsum—one to N13.58bn in 2016. Although External debt important industrial feedstock which is used dropped to $28.54mn in 2016 from $30.46mn in for making gypsum drywall, an alternative to 2015, Yobe’s total debt stock has steadily concrete blocks—as well as 152.8million tons of climbed since 2013, rising from N6.4bn in 2013 Diatomite, which is essential for manufacturing to N7.3bn in 2014 and N9.9bn in 2015. This may insulators, roofing sheets, plastic, paints, be due to an increase in its Recurrent pesticides and cement mixtures. expenditure; average monthly Recurrent Yobe could return to financial stability on the expenditure was N3.85bn as at December 2016. back of her solid mineral deposits being The inference is that the State had average channeled into a viable industrial and Monthly personnel and Overhead costs of manufacturing economy, provided the war N1.64bn and N2.21bn respectively. against insurgency brings relative peace to the State and her neighbours. For 2017, Yobe’s budget allocation figure for 2017 is N69.3bn. Its total Recurrent expenditure is earmarked as N41.9bn, with projected monthly averages of N3.49bn. The State’s FAAC allocations continue to drop – from N50.8bn in 2014, to N39bn in 2015 and N30.9bn in 2016. It therefore pertinent that since its statutory It therefore pertinent that since its statutory allocation from the federal government has allocation from the federal government has significantly dropped, Yobe should endeavour significantly dropped, Yobe should endeavour to step up its efforts to boost the local to step up its efforts to boost the local economy economy and aggressively increase its IGR. and aggressively increase its IGR. Though IGR Though IGR figures have shown a significant figures have shown a significant increase from increase from N2.25bn in 2015 to N3.24bn in N2.25bn in 2015 to N3.24bn in 2016, figures 2016, figures remain indeterminable this year. remain indeterminable this year.

A way out could be for Yobe to exploit its solid mineral resources, as well as tap into its status of having one of the largest cattle markets in West Africa, situated in Potiskum. Yobe will have to develop a grazing reserve or ranching system that can hold millions of herd of cattle, whilst leveraging on its wind and solar potentials to irrigate the grazing fields. With

State of States 73 HEALTH INDICATORS

NET FAAC ALLOCATION 2017 18,681 65 101 0.4% N3.46bn (1000 birth) (1000 birth) N2.18bn N2.14bn N2.16bn N1.86bn N1.87bn N1.84bn Projected HIV Infant Under 5 HIV Prevalence Population Mortality Mortality 2014 Rate 2014 2014 2012

Zamfara State Jan Feb Mar Apr May Jun Jul NET FAAC TOTAL DEBT ALLOCATION IGR STOCK 2012 N48.02bn 2012 N2.59bn 2012 N19.87bn 2013 N56.81bn 2013 N3.04bn 2013 N33.37bn 2014 N51.25bn 2014 N3.15bn 2014 N17.51bn 2015 N32.06bn 2015 N2.74bn 2015 N53.17bn 2016 N22.95bn 2016 N4.78bn 2016 N68.62bn

IGR TOP AGRICULTURAL PRODUCTS SOLID MINERAL PRODUCTION 15.23% Structure of State’s Revenue 2017 NET FAAC

Guinea Corn Livestock Cowpea 101,809.19tons 84.77% (Cattle) (2015)

IGR

AVERAGE MONTHLY REVENUE (JAN-JUL 2017) N1.42BN N794.5M N/A N398.1M*

Average Average Average Monthly Monthly Average Monthly Internally Statutory Monthly VAT 13% Share Of Allocation Generated (Jan-Jun 2017) Derivation Revenue N2.61bn* (Jan-Jun 2017) (Jan-Jun 2017) (Jan-Jun 2017)

N N2.10bn* AVERAGE MONTHLY AVERAGE MONTHLY PERSONNEL RECURRENT EXPENDITURE COST (JAN-JUN 2017) N58.3bn (JAN-JUN 2017) Domestic N1.32bn* Debt AVERAGE MONTHLY OVERHEAD N3.42bn* COST (JAN-JUN 2017)

Monthly commitments (Recurrent expenditure) ABILITY TO MEET N3.42bn* $33.6m MONTHLY RECURRENT External EXPENDITURE Debt Total average monthly revenue COMMITMENTS N2.61bn* (2016) (JAN - JUN 2017) Shortfall -N0.80bn (Bad Indicator)

Source: NBS, OAGF, DMO, World Bank, BudgIT Research BudgIT Estimate* State of States 74 OPPORTUNITIES Sustainability Rank Ease of Doing 19 Business 26 Days ZAMFARA STATE Solar Power Manufacturing Mining Starting a Hub Business

Zamfara is widely cited as one of Nigeria’s State is also becoming a powerhouse in terms poorest States, one which has not fully tapped of gold mining, we advise that Zamfara should into its agribusiness and farming potentials to formalise the mining cycle, to prevent any help open up its economy, nor taken a cue from recurrence of the lead poisoning epidemics neighbouring Kebbi State. Agriculture employs which ravaged communities, and still blights up to 90% of the population in Zamfara, with victims. about four million hectares of land cultivated. Noteworthy is that the State is investing in a 25MW greenfield solar power project spanning Though the State increased its internally 50 hectares, on the outskirts of the city of generated revenue significantly from N2.74bn Gusau. As this plant could potentially generate in 2015 to N4.78bn in 2016, FAAC allocations significant amounts of electricity in the near totalled N12.05bn between January and June term which could transform the State into an 2017. This was a N2bn increase from FAAC agro-allied manufacturing hub, Zamfara would allocations of N10.2bn within the same period do well to ensure kickoff and sustainability of last year. this project is achieved.

In addition to this, Zamfara’s Domestic debt rose to N58.3bn in 2016, from N53.16bn in 2015. Judging by its current budget, it is likely the State will increase its debt profile to sustain its chequered economy; the spending plan for 2017 shows an increment of over N115bn, from We argue that a priority for Zamfara should N107bn in 2016. A projected N74bn is to be be sustainable investments to improve yield f expended on Capital projects and N41bn for or the corn, beans and legumes the State is Recurrent Expenditure, including Overhead already known for. The reported intended Irish and Personnel costs, coming to an average potato processing plants should be matched monthly figure of N3.42bn. with enhanced efficiency through mechanisation, to complement any efforts to reach cited We argue that a priority for Zamfara should be production figures of three million tons a sustainable investments to improve yield for the nnually. corn, beans and legumes the State is already known for. The reported intended Irish potato processing plants should be matched with enhanced efficiency through mechanisation, to complement any efforts to reach cited production figures of three million tons annually.

Zamfara’s economic plan going forward should take into account its large deposits of solid minerals including gold, copper, iron ore, tantalite and manganese, to build an industrial economy around these commodities. As the

State of States 75 RANKINGS States’ Fiscal Sustainability Index

Total Index 2 Sustainablity ***Internally Estimated Recurrent Index 1 (Monthly Index ( (Index Generated Monthly Expenditure (Recurrent Recurrent A x 0.35) + **Gross Statutory **13% Share of **Gross VAT Revenue Based Revenue after budget Expenditure / Expenditure Index 3 (Total (Index B x Allocation Derivation-Net Allocation on 2016 estimate deductions *Total Debt estimate IGR+Derivation Estimately / Debt Stock / 0.50) + (Index (NGN'bn) (NGN'bn) (NGN'bn) (NGN'bn) (NGN'bn) Stock (NGN'bn) (NGN'bn) +VAT) Total Revenue) Total Revenue) C x 0.15)) Scores 75.89 33.36 10.65 85.29 16.27 157.21 141.00 1.09 0.72 0.81 0.86 115.78 67.84 0.2 44.69 302.43 32.08 734.72 305.28 0.88 0.79 1.91 0.99 100.96 22.01 0 6.09 72.98 8.01 107.6 102 1.29 1.06 1.12 1.15 86.98 39.38 0 12.2 30.96 7.67 111.56 79.43 1.84 0.86 1.21 1.26 79.55 88.49 47.04 6.03 23.27 13.49 170.92 169.3 2.22 1.05 1.06 1.46 68.62 23.35 0 6.31 16.19 4.54 23.26 56.6 2.52 1.04 0.43 1.46 68.29 66.55 30.5 6.41 44.06 10.8 254.2 158 1.95 1.22 1.96 1.59 63.03 23.18 0 5.94 14.24 4.08 70.96 55.2 2.74 1.13 1.45 1.74 57.55 23.92 1.77 5.38 12.69 4.03 66.17 57.4 2.89 1.19 1.37 1.81 55.23 20.41 0 5.16 17.25 3.98 53.14 64.28 2.87 1.35 1.11 1.84 54.22 24.05 1.59 5.93 23.04 4.36 101.35 76.56 2.51 1.46 1.94 1.9 52.66 28.17 0 7.11 5.55 4.14 42.3 47.73 3.77 0.96 0.85 1.93 51.87 26.35 0 6.06 5.88 3.78 45.88 48.00 4.02 1.06 1.01 2.09 47.87 66.11 33.38 5.1 7.91 8.6 152.2 155.1 3.34 1.5 1.48 2.14 46.66 30.18 0 7.73 17.05 5.3 131.56 83.47 3.37 1.31 2.07 2.14 46.63 23.69 0 5.6 3.13 3.33 34.77 40.23 4.61 1.01 0.87 2.25 44.49 24.59 0 5.65 9.57 3.85 81.17 58.71 3.86 1.27 1.76 2.25 44.46 22.15 0 5.13 3.24 3.31 22.32 41.9 5 1.06 0.56 2.36 42.31 22.61 0 5.56 4.78 2.61 68.62 41 3.97 1.31 2.19 2.37 42.2 26.92 0 6.43 8.68 3.67 99.76 58.85 3.9 1.34 2.27 2.37 42.15 21.65 0 5.15 5.9 3.05 45.59 49.3 4.46 1.35 1.25 2.42 41.27 26.56 1.93 6.05 5.87 3.41 111.72 53.73 3.88 1.31 2.73 2.42 41.24 25.39 0 6.17 9.56 3.82 74.15 66.3 4.22 1.45 1.62 2.44 40.95 20.71 0 4.9 3.4 2.99 76.2 38.6 4.65 1.08 2.12 2.48 40.27 32.93 7.92 5.75 8.68 4.35 68.33 95.16 4.26 1.82 1.31 2.6 38.49 20.45 0 5.12 2.34 2.95 42.27 40.17 5.38 1.13 1.19 2.63 38.03 22.7 0 5.63 5.79 3.34 87.81 60.06 5.26 1.5 2.19 2.92 34.27 25.53 0 6.36 3.54 3.82 28.94 61.88 6.25 1.35 0.63 2.96 33.82 24.74 0 5.85 4.55 3.67 34.64 63.33 6.09 1.44 0.79 2.97 33.68 28.38 0 9.16 18.88 4.97 137.92 127.57 4.55 2.14 2.31 3.01 33.23 22.71 0 5.48 14.78 2.92 163.37 74.52 3.68 2.12 4.66 3.05 32.81 21.27 0 5.13 2.94 2.61 59.91 46.89 5.81 1.5 1.91 3.07 32.57 23.58 0 5.69 9.19 2.96 119.27 69.36 4.66 1.95 3.35 3.11 32.16 27.4 0 6.11 2.68 3.8 37.69 59.66 6.79 1.31 0.83 3.15 31.7 20.44 0 5.12 2.99 2.15 102.47 55.03 6.78 2.14 3.98 4.04 24.76 21.34 0 5.71 8.88 1.37 168.68 75.8 5.19 4.6 10.24 5.65 17.69 ** OAGF *** NBS * DMO BudgIT Research State of States 77 Average Monthly Recurrent Average Monthly Expenditure Revenue Shortfall State (NGN'bn) (NGN'bn) (NGN'bn) Abia 4.78 4.03 -0.75 Adamawa 5 3.34 -1.66 Akwa-Ibom 14.11 13.49 -0.62 Anambra 4.72 4.54 -0.18 Bauchi 4.9 3.67 -1.24 Bayelsa 12.93 8.6 -4.33 Benue 5.53 3.82 -1.71 Borno 4.97 3.8 -1.18 Cross-River 6.21 2.92 -3.29 Delta 13.17 10.8 -2.36 Ebonyi 3.35 2.95 -0.39 Edo 6.38 4.36 -2.02 Ekiti 4.59 2.15 -2.44 Enugu 4.6 4.08 -0.51 Gombe 3.91 2.61 -1.3 Imo 4.48 3.41 -1.07 Jigawa 5.16 3.82 -1.33 Kaduna 6.96 5.3 -1.65 Kano 6.62 7.67 1.05 Katsina 3.98 4.14 0.16 Kebbi 3.35 3.33 -0.03 Kogi 4.89 3.85 -1.04 Kwara 5.36 3.98 -1.38 Lagos 25.44 32.08 6.64 Nasarawa 3.22 2.99 -0.23 Niger 4 3.78 -0.22 Ogun 8.5 8.01 -0.49 Ondo 7.93 4.35 -3.58 Osun 6.32 1.37 -4.94 Oyo 10.63 4.97 -5.66 Plateau 5.78 2.96 -2.82 Rivers 11.75 16.27 4.52 Sokoto 5.28 3.67 -1.61 Taraba 4.11 3.05 -1.06 Yobe 3.49 3.31 -0.18 Zamfara 3.42 2.61 -0.8

Source: OAGF, NBS, State Government websites, BudgIT Research

State of States 78 INTERNALLY GENERATED REVENUE RANKING 2016

Rank State IGR 1 LAGOS N302.42bn 2 RIVERS N85.29bn 3 OGUN N72.98bn 4 DELTA N44.06bn 5 KANO N30.96bn 6 AKWA IBOM N23.27bn 7 EDO N23.041bn 8 OYO N18.88bn 9 KWARA N17.25bn 10 KADUNA N17.05bn 11 ANAMBRA N16.19bn 12 CROSS RIVER N14.78bn 13 ENUGU N14.24bn 14 ABIA N12.69bn 15 KOGI N9.57bn 16 BENUE N9,5bn 17 PLATEAU N9.19bn 18 OSUN N8.88bn 19 ONDO N8.68bn 20 BAUCHI N8.68bn 21 BAYELSA N7.91bn 22 TARABA N5.89bn 23 NIGER N5.88bn 24 IMO N5.87bn 25 ADAMAWA N5.79bn 26 KATSINA N5.5bn 27 ZAMFARA N4.78 28 SOKOTO N4.55bn 29 JIGAWA N3.54bn 30 NASARAWA N3.40bn 31 YOBE N3.24bn 32 KEBBI N3.13bn 33 EKITI N2.99bn 34 GOMBE N2.94bn 35 BORNO N2.68bn 36 EBONYI N2.34bn

Source: NBS

State of States 79 AVERAGE MONTHLY VAT (JANUARY- JULY, 2017) States (NGN) LAGOS 6,383,816,134 KANO 1,743,331,063 RIVERS 1,521,049,563 OYO 1,308,941,372 KADUNA 1,104,363,260 KATSINA 1,015,542,421 BAUCHI 918,014,304 DELTA 915,143,102 JIGAWA 909,205,394 ANAMBRA 901,268,242 BENUE 881,566,789 BORNO 873,328,362 OGUN 870,487,277 NIGER 865,251,995 IMO 864,211,202 AKWA IBOM 861,183,576 ENUGU 849,053,695 EDO 847,067,182 SOKOTO 835,783,733 ONDO 821,763,988 OSUN 816,042,328 PLATEAU 812,781,199 KOGI 807,843,329 ADAMAWA 803,832,873 KEBBI 799,403,800 ZAMFARA 794,511,231 CROSS RIVER 782,329,765 ABIA 768,814,050 KWARA 737,001,458 TARABA 735,500,124 YOBE 733,101,280 GOMBE 732,364,340 EKITI 731,717,046 EBONYI 731,247,004 BAYELSA 728,425,761 NASSARAWA 700,365,288

Source: OAGF, BudgIT Research

State of States 8 0 NET STATUTORY ALLOCATION (AVERAGE MONTHLY- JAN - JULY, 2017) States (NGN) AKWA IBOM 10,690,518,995 RIVERS 7,637,456,441 BAYELSA 7,209,729,199 DELTA 6,215,816,362 KANO 3,349,065,602 ONDO 2,804,413,895 KADUNA 2,778,697,988 BORNO 2,698,802,556 KATSINA 2,664,622,641 JIGAWA 2,619,759,094 SOKOTO 2,454,242,224 NIGER 2,420,420,220 YOBE 2,306,286,342 ANAMBRA 2,286,269,560 KEBBI 2,266,016,288 KOGI 2,243,179,079 ABIA 2,204,653,026 BENUE 2,140,211,052 OYO 2,084,541,852 ADAMAWA 2,057,831,946 IMO 2,055,054,506 ENUGU 2,049,508,749 EBONYI 2,028,508,694 BAUCHI 2,026,289,591 NASSARAWA 2,005,122,509 TARABA 1,822,376,389 KWARA 1,802,323,965 GOMBE 1,631,957,975 EDO 1,593,064,958 ZAMFARA 1,420,878,226 PLATEAU 1,385,449,601 EKITI 1,165,106,664 OGUN 1,061,020,169 CROSS RIVER 910,556,895 LAGOS 491,291,764 OSUN -183,118,491

Source: OAGF, BudgIT Research

State of States 81 RANKINGS -DOMESTIC DEBT ( 2016) States (NGN) LAGOS 311,755,801,825.04 DELTA 241,231,439,060.79 AKWA IBOM ** 155,431,513,524.27 OSUN 147,069,973,626.49 RIVERS ** 142,424,091,344.00 BAYELSA 140,177,083,911.42 CROSS-RIVER 128,142,093,128.98 OYO 115,886,553,198.89 PLATEAU 110,340,669,344.38 KANO 93,715,181,155.05 IMO 93,267,764,679.14 EKITI 85,049,678,107.89 OGUN *** 75,921,433,395.59 KOGI 71,381,258,449.39 BAUCHI 69,988,356,863.98 BENUE 63,526,706,066.01 KADUNA 63,276,471,968.43 ADAMAWA 62,157,535,395.46 NASARAWA 59,033,751,798.50 ZAMFARA 58,321,024,470.39 ABIA 53,525,312,006.52 ONDO 53,159,719,890.95 ENUGU 48,417,542,411.95 GOMBE 48,312,227,448.91 EDO 45,091,949,113.97 TARABA 38,868,702,728.14 KWARA 38,136,723,517.24 NIGER 31,984,093,598.83 BORNO 30,929,430,222.10 EBONYI 28,057,144,823.57 SOKOTO 22,450,254,651.14 KATSINA * 21,449,608,359.00 KEBBI 20,650,989,926.98 JIGAWA * 19,005,549,048.55 YOBE 13,581,297,872.19 ANAMBRA 3,993,892,365.13

Source: DMO *Jigawa and Katsina States' Figures are as at March 2016 ** Akwa-Ibom and Rivers States' Figures are as at June 2016 ***Ogun State's Figures are as at December 2015 State of States 82 RANKINGS : EXTERNAL DEBT ( 2016)

Amount in USD LAGOS 1,380,650,731.09 KADUNA 222,882,926.46 EDO 183,641,998.74 CROSS-RIVER 114,995,639.01 OGUN *** 103,416,368.77 BAUCHI 97,174,751.48 ADAMAWA 83,731,530.91 ENUGU 73,588,934.02 OYO 71,913,437.74 OSUN 70,533,845.79 KATSINA * 68,060,334.71 ANAMBRA 62,883,387.47 IMO 60,217,190.98 KANO 58,247,338.91 EKITI 56,877,230.80 NASARAWA 56,021,853.27 AKWA IBOM ** 50,555,649.25 ONDO 49,527,401.22 KWARA 48,975,899.49 RIVERS ** 48,256,593.97 EBONYI 46,383,284.02 KEBBI 46,101,478.45 NIGER 45,349,530.40 DELTA 42,318,066.03 ABIA 41,290,438.92 SOKOTO 39,785,679.95 BAYELSA 39,252,787.66 GOMBE 37,841,651.38 BENUE 34,683,473.86 ZAMFARA 33,614,368.27 JIGAWA * 32,415,951.20 KOGI 31,947,420.16 PLATEAU 29,139,067.38 YOBE 28,536,278.90 BORNO 22,068,385.04 TARABA 21,926,982.52

*Jigawa and Katsina States' Figures are as at March 2016 ** Akwa-Ibom and Rivers States' Figures are as at June 2016 ***Ogun State's Figures are as at December 2015

State of States 83 N 2017 BUDGET State Budget Size Lagos N812.99bn Rivers N470bn Akwa-Ibom N371.29bn Cross-River N301bn Delta N294.4bn Bayelsa N243.2bn Ogun N221bn Kano N217.9bn Kaduna N214.92bn Oyo N208.65bn Sokoto N204.3bn Borno N183.84bn Kogi N174.85bn Ondo N170.85bn Benue N163.8bn Edo N153.18bn Bauchi N145.45bn Katsina N144.09bn Plateau N139.49bn Kebbi N139.33bn Osun N138.2bn Kwara N135.26bn Imo N131.14bn Jigawa N129.87bn Ebonyi N127.2bn Adamawa N120.46bn Niger N116bn Anambra N115.5bn Zamfara N115.2bn Taraba N110.2bn Enugu N105.72bn Abia N102.55bn Ekiti N94.46bn Gombe N90.56bn Nasarawa N69.9bn Yobe N69.3bn Source: State Government websites, BudgIT Research State of States 8 4 2016: PER CAPITA INTERNALLY GENERATED REVENUE Amount in NGN State Amount LAGOS 24,096 OGUN 13,988 RIVERS 11,677 DELTA 7,779 EDO 5,440 KWARA 5,404 AKWA IBOM 4,245 CROSS RIVER 3,822 BAYELSA 3,470 ABIA 3,406 Average ENUGU 3,227 N3,395/Year ANAMBRA 2,929 OYO 2,408 KANO 2,367 PLATEAU 2,188 KOGI 2,139 KADUNA 2,066 TARABA 1,922 OSUN 1,888 ONDO 1,859 BENUE 1,664 ADAMAWA 1,363 NASARAWA 1,348 BAUCHI 1,327 IMO 1,085 NIGER 1,059 ZAMFARA 1,058 YOBE 984 EKITI 914 SOKOTO 910 GOMBE 903 EBONYI 813 * State Population Source: NPC 2016 Population Forecast 708 KATSINA ** IGR Numbers KEBBI 705 Source: NBS 2016 JIGAWA 607 BORNO 457 Source: NBS, National Population Commission, BudgIT Research AVERAGE GROWTH RATE OF STATES’ DEBT BETWEEN 2012 AND 2016 REMAINS ELEVATED AT 22.16%, WHILE AVERAGE GROWTH RATE OF INTERNALLY GENERATED REVENUE IS 9.04%. CLEARLY, THE SUSTAINABLE PART FOR STATES IS TO REIN IN DEBT UPTAKE AND FOCUS MORE ON IMPROVING INTERNALLY GENERATED REVENUE. STATE GOVERNMENTS, THEREFORE, NEED TO TREMENDOUSLY EMBRACE A HIGH LEVEL OF TRANSPARENCY AND ACCOUNTABILITY, DEVELOP WORKABLE ECONOMIC PLANS, TAKE HAIRCUTS — ESPECIALLY ON OVERHEADS — EXPAND THEIR INTERNALLY GENERATED REVENUE (IGR) BASE, AND CUT DOWN ON DEBT ACCUMULATION WITHOUT A CONCRETE REPAYMENT PLAN. emi usu F Photo Credit: W www.yourbudgit.com

SIMPLIFYING THE NIGERIAN BUDGET

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