Internally Generated Revenue and Financial Viability of Nigerian States
Abstract
A state's ability to sustain its operations, meet financial obligations, and support economic growth without over-reliance on external borrowing or unsustainable fiscal practices is crucial for financial viability, applicable to both developed and developing nations. This study aimed to investigate how internally generated revenue affects financial viability in the Southwest states of Nigeria, considering local tax systems and economic conditions. This study utilized an ex-post facto research design, collecting secondary data from the annual reports and websites of state governments in Nigeria. The research focused on the internally generated revenue of 36 state governments, with a purposive sampling technique selecting 6 southwestern states of Nigeria. This study covered a 10-year period from 2014 to 2023. Data analysis was conducted using both descriptive statistics (including mean, median, standard deviation, skewness, and kurtosis) and inferential statistics (such as panel regression analysis and correlational analysis). The regression analysis showed that aids/grants and tax revenue both had a positive and significant impact on the financial viability of Nigerian states. Conversely, investment income and rental income were found to have a negative and insignificant effect on the financial viability of these states. This study concludes that the financial viability of Nigerian states is strongly supported by aids, grants, and tax revenue. This study recommends that Nigerian States should continue to seek and effectively utilize aids and grants to support essential infrastructure and services, contributing to long-term financial viability.
Keywords
Internally generated revenue; aids/grants/ tax revenue; investment income; rental
References
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