Imo needs to create 275,361 jobs to close unemployment gap - BudgIT

Authoritative research organization, BudgIT, says Imo State would have to incentivize the private sector to set up local operations capable of creating 275,361 jobs, in order to close the unemployment gap and boost revenue from Pay As You Earn, PAYE.

This much was extracted by Fresh Angle International, from a preliminary report of ranking of all 36 states’ fiscal performance in 2021 as published by BudgIT on its twitter handle this morning, Wednesday October 5.

According to BudgIT, Imo state emerged 20th in the 2021 ranking, with a 79% dependence on FAAC – the worst of all Southeastern states.

The report further revealed: “As at 2020, Imo state depended on the FG, through statutory transfers, for about 79.23% (N65.20bn) of its total recurrent revenue while ONLY 20.76% (N17.08bn) was realized from IGR, thus exposing it to significant risks of increased borrowing whenever there are shocks to FAAC.

“The state recorded N65.20bn as Gross FAAC in 2020 due to COVID-19 shocks, a drop from the N67.88bn realised in 2019.

“ON Internally Generated Revenue, Imo’s IGR saw a modest growth of 6.13% from N16.09bn in 2019 to N17.08bn in 2020.

“The components of its IGR had varying degrees of growth – income taxes (PAYE) grew slightly by 3.23% from N12.42bn in 2019 to N12.82bn in 2020, while Road Taxes declined by -41.17% from N901.2m in 2019 to N530.5m in 2020. MDAs’ revenue also saw a 171.93% surge.

“Unfortunately, this growth was too small to reduce the state’s high dependency on statutory handouts from the federation account.

“On IGR per capita, Imo shad one of the smallest of N2,779 compared to the country average of N4,616 per citizen or the best IGR per capita performance of N29,373 recorded by Lagos state.

“As seen in previous years, Imo state in 2020 prioritized investment in operating expenses which gulped N57.35bn or 65.16% of the state’s total expenditure, over investments in capital infrastructure, which received N28.57bn or 32.45%.

“The balance of N2.11bn or 2.39% was spent on loan repayments as part of its financing activities. 

“Overall, Imo state’s investment in capital expenditure per capita of N4,647 is significantly smaller than the country average of N8,129 per citizen.

“Among other fiscal reform options the state must consider, we reiterated that Imo should put more effort into fully implementing the Treasury Single Account (TSA) reforms to help it manage its finances more efficiently”.

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