The Economy of the North-East: Adamawa State

Urenna Ukonne | Friday 19th July, 2019

       

Adamawa State came was created in 1991 and originated from the former Gongola state. The state capital is Yola. The state covers approximately an area of 38,700 square kilometers. It is estimated that the population is about 4.28 million.

Adamawa’s gender distribution is closely aligned between males and females with about 50.6% males and 49.4% females making up the population. Adamawa’s age distribution has about 51.9% of its population in the 15-64 age bracket, thus showing a viable labour force and active working population.

Adamawa’s average annually internally generated revenue (IGR) is about N5.528 billion for a period of 5 years between 2014 to 2018. Although the state has significantly improved in its IGR performance over the years, Adamawa still has one of the lowest IGR. In 2018 the state’s IGR was ₦6.2 billion, there is still a lot that can be achieved in the state to increase its revenue. The total revenue available to the state in 2018, comprised of IGR of ₦14.83billion and net Federation Account Allocation (FAAC) of ₦39.32 billion which amounted to ₦55.7 billion.

In 2018, the State’s budget was ₦177.9 billion. Adamawa State was only able to finance 3% of its 2018 budget with its IGR. With a 2019 appropriation bill of ₦244 billion, Adamawa State needs to generate as much as ₦104.7 billion as IGR, if it is to be self-sufficient in financing its recurrent expenditure in 2019. According to National Bureau of Statistics, Adamawa’s GDP per capita is estimated to be $ 1,417billion (2007).

As with other North-Eastern states, the main occupation of indigenes of Adamawa is agriculture and it currently serves as a major source of income for most of its citizens. There is the need to include these farmers in the tax net in order for the state to generate more revenue from taxes. The average tax revenue between 2016-2018 in the state was about ₦3.7 billion.

Some of the crops produced in the state are maize, yam, cassava, guinea corn, millet and rice, cotton, groundnut. Large exportation of these crops is advised for greater revenue.

Rice is highly consumed all over the world, thus the high demand for it. With large production of this crop, the state can perform exceptionally in its IGR through exportation and domestic sales given that the it would feed a large population of about 201 million Nigerians. The state government should look into manufacturing more rice mills in order to increase the production of rice in large quantities and enable Nigeria join the chain of top rice producing countries such as India, China, Indonesia, Bangladesh and Thailand.

Cotton, is another lucrative crop produced in the state. If produced at optimal levels, it could generate enormous revenue for the state due to its diverse uses. It is needed in the pharmaceutical, beauty and clothing industries amongst others.

In terms of tourism, the state is living up to its name known as ‘land of beauty’. Some of the untapped tourist attractions include Mandara Mountains, Koma Hills, Lamurde, all of which could enable the state generate revenue.

It is important to take into consideration the fact that the state has been under attack by insurgents in recent years and this has greatly affected businesses and farmers. Although the state government has made efforts to tackle the insecurity, efforts need to be intensified in order to ensure economic development in the state and reduce over dependence of revenue from the Federal Government.

Adamawa ranked 32nd amongst the 36 states in Nigeria in terms of internally generated revenue in 2018. This further reiterates the need for Adamawa state to improve its IGR figures. The state also has an external debt of $ 97,790,423.73 and a domestic debt of ₦67.01 billion.

With the proper implementation of the all processes and procedures which includes enforcing a better tax administration, development of its agricultural and manufacturing industries, ensuring security within the state, Adamawa state could improve its IGR, be self-sufficient and meet its ‘next level’ budget.