Adamawa State Economic Profile: IGR and Statistics

Adamawa being an extremely diverse state compared to other states in Nigeria is one of the northern states with predominately several economic activities which predominantly involves farming.

Located in the northeastern region of Nigeria, Adamawa state shares a border with Cameroon and Borno to the west, Gombe to the west, and Taraba to the southwest. The state’s capital is Yola.

Quick Economy Overview of Adamawa State

Historically, Adamawa State is primarily an agricultural region; hence its economy is dependent on products like livestock and commodities like cotton, groundnuts, millet, cassava, guinea corn, and yams.

After years of the Boko Haram insurgency slowing down development in the state, Adamawa has the eleventh lowest Human Development Index in the country.

However, since the activities of insurgents are at a minimum, development is starting to pick up in some parts of the state.

From 2014 to 2018, Adamawa generated at least an average of NGN5.528 billion each year in its economy in addition to the Federal allocation.

Although the state’s IGR performance has improved greatly over the years, Adamawa still has one of the lowest IGR among the Nigerian States with an IGR of NGN6.2 billion in 2018 and as of 2021 has a total IGR of NGN6,086, 576, 008.62.

Population Distribution of Adamawa

Adamawa is the eighth largest of Nigeria’s 36 states by land area, but the thirteenth least populous, with 2016 population estimates of 4.25 million people.

There are several mountains in the area which range from the Atlantika, Mandara, and Shebshi ranges, as well as the Adamawa Plateau which dominates the state’s landscape.

Not only this, the state is cut through by several valleys and rivers (the Benue and Gongola rivers, in particular).

The northern lowlands of Adamawa belong to the West Sudanian savanna, while the southern lowlands are a part of the wetter Guinean forest-savanna mosaic.

The highlands, meanwhile, belong to the Mandara Plateau mosaic and the Cameroonian Highlands forests ecoregions.

Many different peoples have lived in what is now Adamawa state for a long time: the Bwatiye (Bachama), Bali, Bata (Gbwata), Gudu, Mbula-Bwazza, and Nungurab (Lunguda) in the state’s central region; the Kamwe in the state’s north and central region; the Jibu in the far south; the Kilba, Marghi, Waga, and Wula in the north

Sunni Muslims make up roughly 55% of Adamawa state’s population, while Christians make up about 30% and followers of traditional ethnic religions make up the remaining 15%.

Below is the population figure and estimates of Land of Opportunity from 2006 to 2016

IGR of Adamawa State

Pay-As-You-Earn taxes (a progressive form of personal income taxation), Direct Assessment taxes (a form of personal income taxation for self-employed individuals), Road Taxes, revenues from ministries, departments, and agencies (MDAs), and other taxes all contribute to state’s IGR.

The bulk of IGR is being collected annually through Pay-As-You-Earn (PAYE) and Direct Assessment.

Currently, the total IGR of Adamawa according to NBS 2021 data is NGN6,086, 576, 008.62 which are further broken down as below:

What is Adamawa’s GDP?

Gross Domestic Product (GDP) is a monetary measurement of the total of all products and services produced in an economy, including at the State level, over a given period.

Currently, the GDP of Adamawa state stood at $3.8 Billion and GDP Per Capita stood at $833.

Allocation from Federal Government

Among the states that receive less Federal allocation is Adamawa state. The state only gets about NGN3.75 billion from the federal government.

Being a state that depends heavily on peasant farming, and more civil servants, the state over the years has never generated up to 20% of the Federal allocation that the state enjoys from the federal government.

Interestingly, there is a link between internally generated revenue and development. Several states in Nigeria, including Lagos, Rivers, Ogun, Delta, and the Federal Capital Territory (FCT), rank high on the development index, this is because these states have high IGR at the same time have the lion’s share from the Federal Allocations to all the states in the federation. 

States with higher Federal allocation are usually oil-producing regions in the country. After its discovery in the then-Eastern Region in 1958, the policy of returning mining rents to their origin was changed to a federally administered account so that everyone might benefit from the industry.

These days, the FG gets 52.68 per cent of the money that comes into the federation’s coffers (mostly from oil and VAT). The federal government receives 40.40 per cent, the states 26.72 per cent, and the municipalities 20.60 per cent.

Major companies or businesses in Adamawa State

• Commercial banks like Access, First bank among others
• Adamawa Securities LTD
• Amana Capital Pension Limited
• Bengas Industries (NIG.) LTD
• DEKIT Construction LTD
• DIYA, FATIMILEHIN & COMPANY
• MESSRS RICKEY TARFA & COMPANY
• Phardom Group INC.
• System Metal Industries LTD
• TIDDO SECURITIES LTD
• Tower Assets Management LTD
• UHY MAAJI and COMPANY
• Vinna Investments LTD

Economic plan of Adamawa

The state government in Adamawa are taking swift action for them to revitalize the state economy, get more IGR, and also boost the economic performance of the state among its peers at the federal level and globally.

In that regard, the following are some of the economic plans the government has put in place to ensure a better economy for the state:

Adamawa State businessmen have had their taxes reduced by half to help those affected by Covid 19.

This simply will help the various companies from dying off as a result of the hard effects of Covid-19 in the state and the country at large.

Many companies could not withstand the adverse effects these pandemics brought to the nation which is while the state government in fit to keep people in business and revive the economy cut the taxes on companies and businesses to 50%

Furthermore, to boost the state economy and improve the state IGR, the state government embark on a partnership contract with BUA cement to construct a cement plant at Guyuk L.G. which will have a capacity of 3 million metric tons.

This will bring in more hands from the large population of the unemployed labour force from the state, and in the long run, improve the state’s total IGR and total GDP.

Also, the state government has approved the issuance of an N100 billion bond for the Adamawa State Agribusiness Program (ADAS), this action will increase internal revenue (IGR) and provide more jobs for residents who have no jobs and in long run improve the states GDP.

The state government has set out to about 150 Million to settle debts and pay off loans the state is owing which will greatly the upward movement of the state economy.

Also, as an agriculture-based economy state, the government has set out different plans and aids to help Farmers around the State in many ways that will enhance their productivity, improve outputs and as well be one of the largest exporters of farm produce that are being cultivated in the state.

Also, the government has implemented a program to start vaccinating livestock annually to help livestock farmers to protect their herds from contagious diseases.

Challenges of doing business in Adamawa

No state does not have one problem or the other when it comes to business and setting up a company.

Something applies to Adamawa state. Doing business in this state comes with some cons and headaches which I will briefly list down below:

Constrain Business Economy:

As I have earlier raised in this context that this state is predominantly based on agriculture as a source of IGR, doing some other business in this area that is not related to farming may not likely thrive the way you may forecast.

The business that may thrive here must cater for the immediate needs of the farmer, and must not be a business that is set out to care for men and women who are affluent.

Religion barrier:

Also, while I was writing on the population and demography of this state, I said this state is majorly inhabited by Muslims, business that does not has a firm root for the central belief of people in and around here may likely face strong opposition and total refusal leading to lost in capital involved in the investment.

Insecurity:

Though insecurity is a national problem, nonetheless, it is more prevalent in some areas than in others, in the northeast part of Nigeria, Adamawa and Borno precisely, the rate of insecurity and terrorism is very high which will have a great impact on doing business in this area.

Another challenge facing the state is that untapped natural resources in the Land of Beauty are blessed.

Conclusion

As one of the states in Nigeria with many natural resources, lowest IGR and lowest federal allocation. Adamawa state is one of the potential states if the government can look inward to implement more economically friendly policies that have more chances of improving the state IGR.

If the total security threat can be eliminated, the government go into private partnerships with foreign investors and cooperate bodies.

The economy of Adamawa can be self-sufficient if all hands are on deck, more resources that process within the state, and more companies will flock into the state the overall result is improvement in the state’s IGR.

References

Tax Aide (July 19, 2019). “Exploring the economy of the north-east: Adamawa State”. taxaide.com.ng