Nigeria’s 36 states and the Federal Capital Territory (FCT) generated a combined ₦3.63 trillion as Internally Generated Revenue (IGR) in 2024, representing a 49.7 percent increase from ₦2.43 trillion recorded in 2023, according to the latest report from the National Bureau of Statistics (NBS).
The data, compiled by the Joint Tax Board (JTB) from official records and submissions by state revenue agencies, show that the strong growth was driven by higher tax receipts, improved administrative efficiency, and expanded collections by state ministries, departments, and agencies (MDAs).
Lagos, Rivers, and FCT Lead Subnational Revenue Performance
The report revealed that Lagos, Rivers, and the FCT maintained their lead positions in subnational revenue performance.
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Lagos State generated ₦1.26 trillion, accounting for over one-third of total IGR.
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Rivers State followed with ₦317.30 billion,
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while the FCT recorded ₦282.36 billion during the review period.
Together, the three entities accounted for more than half of all subnational revenue, underscoring the concentration of economic activity and fiscal strength in Nigeria’s commercial and administrative centres.
In contrast, Yobe, Ebonyi, and Kebbi States reported the lowest IGR figures, recording ₦11.08 billion, ₦13.18 billion, and ₦16.97 billion, respectively.
Tax Revenue Accounts for 73% of Total IGR
Out of the ₦3.63 trillion total, tax revenue contributed ₦2.66 trillion, representing 73.35 percent of all internally generated income.
Within this category:
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Pay As You Earn (PAYE) remained the dominant source, contributing ₦1.86 trillion — or 69.84 percent of total tax revenue.
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Direct Assessment (taxes on self-employed individuals and informal businesses) and road taxes contributed modestly.
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Capital Gains Tax was the least at ₦10.57 billion, while other taxes such as stamp duties, levies on traders, development charges, and land registration fees accounted for the remainder.
MDAs Revenue and Administrative Efficiency
Revenues from state MDAs — derived from administrative services such as licensing, permits, and other state-level charges — showed significant improvement in 2024.
The NBS report noted that several states introduced digital tax systems, automated payment channels, and expanded service coverage to strengthen non-tax income.
Drivers of Growth
The sharp increase in IGR was attributed to tax reforms, digitisation of state revenue systems, and enhanced compliance enforcement by State Boards of Internal Revenue.
Stronger performance from formal sector payrolls, supported by the expansion of the PAYE base, contributed substantially to the revenue boost.
Analysts also noted that inflationary pressures and the rising cost of goods and services may have indirectly increased nominal revenue collections, though not necessarily reflecting a real expansion of the tax base.
Fiscal Imbalance Across States
While the overall IGR growth reflects fiscal progress, the data continue to highlight the uneven distribution of revenue potential among states.
High-performing regions like Lagos, Rivers, and the FCT rely on strong commercial activity, while others depend heavily on federal allocations.
Economists warn that unless states diversify their economies through industrial development, agricultural value chains, and SME growth, fiscal inequality will continue to widen.
Outlook
With total IGR now above ₦3.6 trillion, subnational governments are gradually improving internal fiscal capacity.
However, the NBS cautioned that figures remain subject to reconciliation and updates by individual state revenue authorities.
Experts project that further digitalisation, improved informal sector inclusion, and fiscal transparency reforms could drive even higher IGR figures in 2025.
The report concludes that strengthening subnational revenue generation is critical for achieving fiscal sustainability, reducing dependence on oil-based federal allocations, and expanding the tax net to capture a larger portion of Nigeria’s working population.