INTERNALLY GENERATED REVENUE (IGR) AND FISCAL VIABILITY OF STATE GOVERNMENTS IN NIGERIA
Abstract
The study assessed the effect of Internally Generated Revenue (IGR) on the fiscal viability of State governments in Nigeria between 1986 and 2018. The study used the Vector Error Correction Model (VECM) to determine the impact of IGR on the revenue generation, total expenditure and the fiscal deficit of States in Nigeria. Finding from the study revealed that the IGR of States in Nigeria had a poor impact on revenue generation, recording its peak value of only 17% contribution. Its contribution to the total expenditure was also small, also recording its peak value at a paltry 9%. Although the IGR in Nigerian states had the desired effect of reducing fiscal deficit, its contribution was however low. In conclusion, the IGR of Nigerian States contributed poorly to the fiscal viability of States. It therefore recommended that to increase revenue, encouragement of tax compliance is advocated. Also, control measures should be put in place to check possible frauds and embezzlement in revenue generation and utilization of State governments.
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