Abia State generated just 1.9% of the South-East’s VAT revenue but took home 18.6% of the total the region received

Key Takeaways

  • The South-East remitted ₦10.94 billion in VAT but received ₦39.15 billion, a 257.7% increase, showing a high reliance on VAT sharing.
  • Abia, the lowest contributor (₦734M), received ₦7.29B, nearly 10× its remittance, making it the biggest relative beneficiary in the region.
  • Anambra, the highest contributor (₦3.56B), received only ₦8.72B, showing a sharing trend where high-contributing states do not necessarily receive the most.
  • Every South-East state received at least 2× what they remitted, with an average allocation of ₦7.83B despite an average contribution of just ₦2.19B.

The VAT remittance vs. sharing in the South-East geopolitical zone of Nigeria reveals a system where some states receive significantly more than they generate. The region remitted ₦10.94 billion in VAT but received ₦39.15 billion, meaning it got back ₦3.58 for every ₦1 contributed—one of the highest sharing ratios in Nigeria.

A striking disparity is seen in Abia, which remitted the least (₦0.73 billion) yet received ₦7.29 billion, nearly 10× its remittance, making it the biggest relative gainer in the South-East.

Conversely, Anambra, the highest contributor (₦3.56 billion), received ₦8.72 billion, reflecting a sharing model where revenue generation does not directly determine allocation.

Similarly, Imo and Enugu, which remitted ₦1.59 billion and ₦1.75 billion respectively, received ₦8.26 billion and ₦7.76 billion, further emphasising how VAT allocation prioritises equalisation over economic output. Despite varying contributions, every South-Eastern state received at least double its VAT remittance, with the region’s average allocation per state standing at ₦7.83 billion, compared to an average remittance of just ₦2.19 billion.

Source:

Federal account allocation committee (FAAC)

Period:

January 2025
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The South-West remitted ₦341.18B in VAT but received only ₦106.85B, getting back just ₦0.31 for every ₦1 remitted.
  • Lagos carried the South-West VAT burden, remitting ₦305.52B (89.6% of the region's total) but receiving only ₦62.59B (20.5% return), making it the highest net contributor in Nigeria.
  • Osun had the most disproportionate gain, remitting a mere ₦590M but receiving ₦7.73B, an astronomical 1,211% return—the highest redistribution gain in the South-West.
  • The entire South-West remitted ₦341.18B but received only ₦106.85B, meaning it got back just ₦0.31 for every ₦1 contributed, highlighting a severe VAT allocation imbalance.
  • Ondo and Ogun remitted only ₦3.3B but received ₦16B combined, far exceeding their generated VAT, while Lagos alone subsidised most of the allocations across the country.
Zamfara, the lowest contributor, received over 5× its input, while Kano, the highest contributor, had the lowest relative gain
  • The North-West region received ₦66.55 billion, more than double its remittance (₦28.31B), showing a heavy reliance on federal VAT sharing.
  • Zamfara, the lowest contributor (₦1.45B), received the highest percentage gain (+433%), getting ₦7.72B, while Kano, the highest contributor (₦9.59B), had the smallest relative gain (+41.5%).
  • Kaduna and Katsina, despite remitting ₦3.50B and ₦3.86B, received ₦10.18B and ₦10.01B, respectively, nearly tripling their remittance.
  • Kano remitted 34% of the zone’s VAT but received only 20.4% of the total allocation, reinforcing that VAT is distributed based on equality and not economic strength.
Every North-East state received at least 2× what they contributed (₦46.68 billion in total), a 211.6% increase
  • The North-East remitted only ₦14.98 billion but received ₦46.68 billion, showing a 211.6% gain due to sharing.
  • Taraba, the lowest contributor (₦0.94 billion), saw the highest percentage gain (635%) with an allocation of ₦6.91 billion, reinforcing that smaller economies benefit the most from VAT sharing.
  • Bauchi, despite remitting just ₦2.44 billion, received the highest allocation (₦8.93 billion), a 266% increase, illustrating how VAT is shared based on equality and population, not economic activity.
  • Every state in the region received at least 2× what they remitted, highlighting the North East’s reliance on VAT sharing and fuelling the fiscal federalism debate on whether VAT should be retained at the state level.
South-west remitted ₦341.38B but received only ₦99.85B
  • South-West drives Nigeria’s VAT but gets little back. The region remitted ₦341.38B (53%) but received only ₦99.85B (29% return).
  • South-South remitted ₦121.84B but got ₦52.49B (43% return); Rivers alone gave ₦90.21B but got just ₦11.01B.
  • The North enjoyed the highest VAT gains, remitting ₦66.18B and receiving ₦161.11B (240% return); the North-West got ₦66.75B from ₦28.31B (235% return).
  • South-East and North-East got the biggest VAT boost. South-East: ₦10.94B remitted, ₦39.13B received (357.6% return); North-East: ₦14.94B remitted, ₦46.68B received (312.5% return).
Lagos State’s IGR skyrocketed 112% from ₦384.26B in 2013 to a record ₦815.86B in 2023
  • Lagos State’s IGR grew by 112%, from ₦384.26B in 2013 to a record ₦815.86B in 2023.
  • Revenue dipped to ₦268.22B in 2015 before recovering and steadily increasing.
  • A major jump occurred in 2019, with IGR rising from ₦382.18B to ₦646.61B in one year.
  • Despite a dip in 2022, IGR hit an all-time high in 2023, signalling a strong economic recovery.
The South-South region got back just ₦0.43 for every ₦1 remitted, one of the lowest VAT returns in Nigeria
  • The South-South remitted ₦121.84B, making it one of the biggest net donors to the national VAT pool.
  • The region received only ₦52.49B, meaning it got back just 43% of its VAT contributions.
  • Rivers State alone remitted a staggering ₦90.21B (74% of the region’s total) but received only ₦11.01B (12.2% return), marking one of the worst VAT allocation disparities in Nigeria.
  • Cross River had the lowest VAT contribution (₦1.55B) but received ₦7.45B, a 380% gain, while Bayelsa, despite remitting ₦12.8B, received only ₦8.02B, less than lower-remitting states like Delta (₦9.05B).
  • Every state in the South-South received more than it remitted, except for Bayelsa and Rivers, with the latter being the only state to suffer a massive VAT deficit.
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