Kwara State Recovers N4.8bn Tax Refunds from Previous Administration

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Tuesday, December 10, 2019 /  01:15 PM / By Proshare Research / Image Header Credit: Ecographics

 

 

The Kwara State government has commenced massive recovery of revenues from the immediate past administration of the State. In a tweet posted earlier today, the governor of the State, Abdulrahman Abdulrasak, said the Economic and Financial Crimes Commission (EFCC) had recovered N4.8bn from the previous administration from unaccounted tax refunds. He also said that there was a further N111m and N50 million recovered from sources undisclosed in addition to the reclaiming of 10 properties and physical cash of about N3.6bn.

 

The governor noted that efforts were ongoing in recovering an additional N4bn believed stolen from the State's Internal Revenue Service (IRS). 



Image 1 Announcement of Kwara State Fund Recoveries 2019


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Source: Twitter handle of the governor of Kwara State,  Abdulrahman Abdulrasak

 

 

Fiscal Status

 

Kwara State's fiscal revenue per capita is the third-largest in the North Central States of Nigeria. The Kwara State government generates N21,910 per citizen compared to Nassarawa State's N22,597 per state-citizen and Abuja FCT's N44,256 (see chart 1 below). The fiscal potential of Kwara State is far higher than its recent revenue figures show, given its strategic location between the North and the South West. The transport, farming (cash crop and dairy) and mining opportunities of the State are still massively underdeveloped. 

 

 

Chart 1 North Central States Revenue per Capita (N') 2018

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Source: National Bureau of Statistics (NBS)

 

 

The State's internal debt is modest at N59.14bn, as it is the 6th largest in the North Central region of the country behind its Northern cousin of Kogi State with an internal debt of N84.92bn. The internal debt of Kwara State is 64% lower than that of Abuja FCT at N164.25bn (see chart 2 below).


 

Chart 2 North Central States Domestic Debt (N') 2018

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Source: National Bureau of Statistics (NBS)

 

 

Kwara State has been less frugal with its foreign debt, apparently taking advantage of lower interest cost of external loans. The State has the third largest external debt of the seven states of North Central Nigeria. The size of the States external loan at US$48.59m is behind Nasarawa at US$59.18m and Abuja FCT at US$61.35m as of year-end 2018. The slight trouble the state may face here is any adverse swing in the external value of the Naira. A rise in the Naira cost of the dollar would nominally increase the States borrowing cost and expose the States treasury to currency translation risk. The rise in currency translation could eat into states modest internally generated revenue (IGR) or its federation account allocation (FAAC) (see chart 4).


 

Chart 3 North Central States External Debt ($') 2018

 

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Source: National Bureau of Statistics (NBS)

 

 

Chart 4 FAAC Account of North Central States in Nigeria (N') 2018

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Source: National Bureau of Statistics (NBS)

 

 

Growth Plot

 

The fiscal growth plan for Kwara would gain a boost from recent revenue recoveries in 2019, but recoveries cannot be a strategy for sustainable revenue growth. Governor Abdulrazak will need to expand economic activity in the state and strengthen the State's revenue capture framework.

 

As impressive as the recent revenue recoveries are the government of Kwara State needs to devise creative ways of repositioning the State's economy and increasing IGR by at least 10% annually over the next four years. An increase in the State's IGR would raise its capital budgets and push the economy towards faster growth and lower unemployment, especially amongst urban and rural youth. 



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Related News

 

1. Crude oil discovered in Kwara State - August 15,2011



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