The World Bank has attributed the rise in Internally Generated Revenue (IGR) across several Nigerian states to the adoption of digital and technology-driven tax systems, which have improved transparency, accountability, and efficiency in revenue collection.
Speaking at the launch of the State of States 2025 report by BudgIT in Abuja, Gloria Joseph-Raji, Senior Economist at the World Bank, said states that have embraced innovative fiscal reforms are outperforming others in domestic resource mobilisation.
Joseph-Raji, who spoke during a panel session on “Domestic Resource Mobilisation at the Subnational Level: Lessons, Missteps, and Opportunities for Reform,” highlighted the impact of the State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme, supported by the World Bank since 2018.
She explained that the initiative incentivised states to publish budget and expenditure data, creating a foundation for data-driven fiscal management and improved revenue performance.
“From the data we have analysed, tax revenues, particularly personal income taxes, direct assessments, and withholding taxes remain the largest and most sustainable sources of IGR for most states.
“We have seen that states which have invested in digital innovations for tax collection are leading in IGR growth. In the past two years, states like Kwara and Enugu have recorded significant improvements, driven largely by modernised tax administration systems,” she said.
Also speaking at the event, Hauwa Nuru, Commissioner for Finance, Kwara State, attributed the state’s rising revenue profile to reforms that prioritise transparency, simplicity, and citizen engagement.
According to her, the Kwara State Internal Revenue Service (KW-IRS) has been fully digitalised, allowing residents and businesses to make payments online with ease.
“We have made it simple for everyone to pay taxes. Our digital system integrates all agencies, ensures transparency, and provides customer support. More importantly, people can see where their taxes are going in infrastructure, healthcare, education, and other visible projects,” Nuru said.
She added that the government’s approach has strengthened public trust, expanded the tax base to include informal sectors, and encouraged compliance.
“When citizens see that taxes are working for them, they are more willing to pay,” she noted.
Nuru also emphasised that Kwara’s local governments are actively participating in the fiscal reform process, managing their budgets independently while investing in projects that reflect community priorities.
In Anambra State, Chiamaka Nnake, Commissioner for Budget and Planning, said the government has embarked on automation and institutional reforms to strengthen fiscal systems, while mobilising communities to participate in development projects.
“We have invested in technology and institutional reform, but we are also leveraging communities to be part of development.
“Our Public-Private-Community Partnership (PPCP) initiative encourages people to build roads, adopt schools, and support healthcare facilities. This model promotes ownership while we continue to formalise revenue collection systems,” Nnake said.
She noted that 70 percent of Anambra’s annual budget is allocated to capital expenditure as part of efforts to ensure citizens’ taxes are visibly translated into development outcomes.
In Cross River State, Michael Odere, Commissioner for Finance, said the state has achieved over 200 percent growth in revenue between 2023 and 2024 due to automation, debt restructuring, and strategic investments in infrastructure and technology.
“In 2023, our revenue was ₦22 billion. In 2024, it rose to ₦46 billion, over 200 percent growth in one year. All our processes are automated. I can check our real-time revenue collection on my phone. Transparency and technology are key,” Odere stated
Odere, however, cautioned that performance assessments should not be viewed solely through the lens of IGR ratios, noting that states operate under different fiscal realities and inherited obligations.
“People often talk about the best or worst performers, but performance must be understood in context. It’s not only about revenue; it’s also about the relationship between IGR and expenditure.
“In our case, we inherited significant foreign debts, some dating back to 1994. We have been paying them off because clearing those obligations improves our fiscal rating and credibility,” he explained
He said one major liability was the Tinapa business resort debt, which had been under the control of the Asset Management Corporation of Nigeria (AMCON) for over a decade.
“Tinapa was an investment that could have transformed our economy, but it was tied up with AMCON for 10–15 years. We have now taken it back and are repurposing it into a technology and innovation hub,”
He added that the state has reclaimed the Tinapa business resort from the Asset Management Corporation of Nigeria (AMCON) and plans to repurpose it as a technology and innovation hub, in partnership with international investors.
“We are working with partners to train thousands of young people in tech and entrepreneurship. This will not only create jobs but also expand our tax base,” he said.
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Meanwhile, Malik Anas, Commissioner for Budget and Planning, Katsina State, shared that the state’s IGR rose from ₦10 billion in 2021 to ₦24 billion in 2024, but acknowledged that this remains below potential.
He said the government is adopting a community-driven tax system and data-based planning to link revenue collection directly to visible development outcomes at the grassroots.
“We now use tax proceeds to fund community projects so people can see the value of what they contribute. We’ve also introduced an e-invoice system for real-time tax assessment and payment, reducing leakages and improving compliance,” Anas explained.
He emphasised that Katsina is building a comprehensive enterprise data warehouse to capture all small and medium-sized businesses, strengthen projections, and broaden the tax base.
“By 2026, we expect to generate up to ₦140 billion annually if our data and digital systems are fully implemented,” he said.
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