Value Added Tax (VAT) is a significant source of revenue for Nigeria’s government, contributing to the Federal Account Allocation Committee (FAAC) distribution among states. While the VAT generation patterns reflect the economic capacities of states, the allocations often paint a contrasting picture of equity and redistribution. In 2024, this trend became more pronounced, with certain states receiving far more than they contributed.
Here’s a breakdown of the VAT generated in each state and what they received, offering a glimpse into the fiscal dynamics across the country.
Top Performers in VAT Generation
1. Lagos State
Generated: ₦2.75 trillion
Received: ₦460.11 billion (16.74%)
Lagos, the economic hub of Nigeria, continues to dominate VAT contributions. However, its share of FAAC allocation remains a fraction of its generation, sparking debates on fiscal federalism.
2. Rivers State
Generated: ₦832.69 billion
Received: ₦186.66 billion (22.4%)
With its vast oil wealth and growing economy, Rivers contributes significantly to VAT but receives a relatively smaller share in return.
3. Oyo State
Generated: ₦272.41 billion
Received: ₦116.83 billion (42.9%)
Oyo’s strong economic base, led by agriculture and commerce, places it high on the VAT generation list.
4. Kano State
Generated: ₦77.76 billion
Received: ₦117.19 billion (150.7%)
Kano’s contribution remains modest compared to its sizable population, but it benefits substantially from VAT redistribution.
5. Delta State
Generated: ₦73.39 billion
Received: ₦80.73 billion (110%)
Delta’s oil wealth and industrial base keep it in the top tier of VAT-generating states.
The Redistribution Factor
While states like Lagos and Rivers generate massive VAT revenues, the FAAC allocation model redistributes funds to less economically active states. For instance:
Katsina State
Generated: ₦22.08 billion
Received: ₦85.59 billion (387.6%)
Cross River State
Generated: ₦9.36 billion
Received: ₦64.25 billion (686.5%)
Imo State
Generated: ₦4.38 billion
Received: ₦70.70 billion (1,613%)
Imo’s extraordinary allocation underscores the principle of fiscal equity aimed at supporting less economically developed regions.
HERE IS THE FULL LIST VAT GENERATED IN STATES ACROSS NIGERIA IN 2024
1. Lagos: N2.75trn
2. Rivers: N832.69bn
3. Oyo: N272.41bn
4. Kano: N77.76bn
5. Delta: N73.39bn
6. Bayelsa: N64.66bn
7. Edo: N53.55bn
8. Anambra: N47.53bn
9. Akwa Ibom: N46.93bn
10. Adamawa: N42.01bn
11. Borno: N35.29bn
12. Niger: N34.84bn
13. Taraba: N32.37bn
14. Kwara: N31.51bn
15. Kaduna: N30.30bn
16. Ekiti: N29.58bn
17. Jigawa: N28.54bn
18. Benue: N26.59bn
19. Ogun: N26.16bn
20. Sokoto: N25.98bn
21. Gombe: N25.45bn
22. Ebonyi: N25.11bn
23. Kogi: N23.61bn
24. Plateau: N22.10bn
25. Katsina: N22.08bn
26. Yobe: N19.79bn
27. Bauchi: N19.59bn
28. Zamfara: N17.83bn
29. Nasarawa: N15.89bn
30. Enugu: N15.39bn
31. Osun: N14.79bn
32. Ondo: N13.80bn
33. Cross River: N9.36bn
34. Kebbi: N8.77bn
35. Abia: N8.68bn
36. Imo: N4.38bn
<Agora Policy, FAAC>
What states contributed to the VAT pool and what they received in 2024
1. LAGOS
Contributed: N2.75trn
Received: N460.11bn (16.74%)
2. RIVERS
Contributed: N832.69bn
Received: N186.66bn (22.4%)
3. OYO
Contributed: N272.41bn
Received: N116.83bn (42.9%)
4. KANO
Contributed: N77.76bn
Received: N117.19bn (150.7%)
5. DELTA
Contributed: N73.39bn
Received: N80.73bn (110%)
6. BAYELSA
Contributed: N64.66bn
Received: N63.42bn (98.1%)
7. EDO
Contributed: N53.55bn
Received: N72.33bn (135.1%)
8. ANAMBRA
Contributed: N47.53bn
Received: N78bn (167.1%)
9. AKWA IBOM
Contributed: N46.93bn
Received: N76.09bn (162.1%)
10. ADAMAWA
Contributed: N42.01bn
Received: N70.41bn (167.6%)
11. BORNO
Contributed: N35.29bn
Received: N76.15bn (215.8%)
12. NIGER
Contributed: N34.84bn
Received: N74.79bn (214.7%)
13. TARABA
Contributed: N32.37bn
Received: N63.24bn (195.4%)
14. KWARA
Contributed: N31.51bn
Received: N63.63bn (201.9%)
15. KADUNA
Contributed: N30.30bn
Received: N88.50bn (292.1%)
16. EKITI
Contributed: N29.58bn
Received: N63.47bn (214.7%)
17. JIGAWA
Contributed: N28.54bn
Received: N76.68bn (268.7%)
18. BENUE
Contributed: N26.59bn
Received: N75.47bn (283.8%)
19. OGUN
Contributed: N26.16bn
Received: N72.10bn (275.7%)
20. SOKOTO
Contributed: N25.98bn
Received: N71.94bn (276.9%)
21. GOMBE
Contributed: N25.45bn
Received: N62.77bn (246.7%)
22. EBONYI
Contributed: N25.11bn
Received: N61.43bn (244.7%)
23. KOGI
Contributed: N23.61bn
Received: N68.74bn (291.2%)
24. PLATEAU
Contributed: N22.10bn
Received: N67.87bn (307.1%)
25. KATSINA
Contributed: N22.08bn
Received: N85.59bn (387.6%)
26. YOBE
Contributed: N19.79bn
Received: N61.78bn (312.1%)
27. BAUCHI
Contributed: N19.59bn
Received: N77.47bn (395.3%)
28. ZAMFARA
Contributed: N17.83bn
Received: N67.87bn (380.7%)
29. NASARAWA
Contributed: N15.89bn
Received: N58.16bn (365.9%)
30. ENUGU
Contributed: N15.39bn
Received: N67.54bn (438.7%)
31. OSUN
Contributed: N14.79bn
Received: N68.62bn (463.8%)
32. ONDO
Contributed: N13.80bn
Received: N68.57bn (496.8%)
33. CROSS RIVER
Contributed: N9.36bn
Received: N64.25bn (686.5%)
34. KEBBI
Contributed: N8.77bn
Received: N66.55bn (758.5%)
35. ABIA
Contributed: N8.68bn
Received: N63.78bn (734.8%)
36. IMO
Contributed: N4.38bn
Received: N70.70bn (1,613%)
Agora Policy, FAAC
A Tale of Two Realities
This system of redistribution, while promoting national cohesion, often sparks debates among stakeholders. Advocates for fiscal federalism argue that states should retain a larger portion of the revenues they generate. Conversely, proponents of the current model emphasize the need to support underdeveloped regions.
Key Takeaways from 2024 VAT Data
1. Economic Powerhouses
Lagos, Rivers, and Oyo remain Nigeria’s economic giants, leading VAT generation.
2. Beneficiaries of Redistribution
States like Imo, Katsina, and Cross River benefit immensely from the current allocation formula.
3. Equity vs. Efficiency
The debate on fiscal federalism versus national equity remains relevant, with 2024’s data further fueling discussions.
The Path Forward
As Nigeria grapples with economic diversification and development, revisiting the VAT allocation formula might be inevitable. Striking a balance between rewarding economic productivity and ensuring equitable development will be crucial for sustainable growth.
What’s your take on Nigeria’s VAT redistribution model? Share your thoughts in the comments below and join the conversation on fiscal federalism.
#VAT2024 #NigeriaEconomy #FiscalFederalism
Source: The Cable
