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How Diverse Is Nigeria’s Economy Across State Lines?

How Diverse Is Nigeria’s Economy Across State Lines?

While Nigeria’s ascendant economy is well documented, little is known about the economies of its 36 individual states, according to TheAfricaReport.

A report by U.S.-based research company Renaissance Capital found big differences in income and social conditions across Nigerian states. Life expectancy and school completion rates vary widely between north and south.

With a gross domestic product of more than $500 billion this year, Nigeria has been living up to its claims as Africa’s No. 1 economy, representing the continent’s political, cultural and economic diversity, according to the report.

Lagos – the state with the largest share of GDP – has expanded its tax base and set up lucrative but controversial public-private infrastructure partnerships that other states have copied.

Monthly oil revenue allocations from the central government account for about a third of Lagos State’s revenue — far less than most other states. Lagos generated more than twice the tax revenue of the 19 northern Nigerian states combined, according to the National Bureau of Statistics. Most states would be bankrupt without the monthly allocations from the federal oil revenue.

Eight Nigerian states are classed as oil producers, earning them an extra share of revenue and allowing productive sectors such as agriculture and manufacturing to be neglected until now.

Large amounts of fruit go to waste every year in Benue State, known as the country’s food basket, because of lack of processing facilities, according to TheAfricaReport. A weak industrial base holds back job creation and deprives Benue State of potential tax revenue.

As much as 90 percent of government revenue goes to paying salaries, according to state Gov. Gabriel Suswam.

One way out would be for the states to expand their revenue bases by attracting new investment.

Simplified land policies and infrastructure upgrades could go a long way towards bringing in investors, according to TheAfricaReport.