Improved Internally Generated Revenue and Sustainable Budget Implementation: A Comparative Study of Lagos and Oyo States

Internally generated revenue is one of the ways through which Nigeria, particularly the State governments can be assisted to overcome their constraints in budget implementation and ensure adequate and responsible public service delivery. Yet, despite itsimportance, many states, but Lagos, are still not taking the advantage to improve on their Internally Generated Revenue (IGR). By way of comparative study and to fill the gap on the need to improve IGR for better budget performance, this paper examined the impact of IGR on sustainable budget implementation in Lagos and Oyo States. Using data on specific categories of IGR and Gross Domestic Product (GDP) of the selected states and applying ex-post facto analysis, the study assesses whether IGR has any significant impact on sustainable budget implementation. The findings of this study reveals that the persistent shortfall in estimates of earnings has inevitably affected the sustainability of budget implementation at both federal and state levels in Nigeria. It further shows that there is a direct relationship between improved IGR and sustainable budget implementation. In view of the above, the study concludes that state governments could achieve sustainable budget implementation through improved IGR; and therefore recommends that there should be a purposeful attitudinal change towards improving IGR at State level in Nigeria as this is evidently seen in the case of Lagos. Therefore, given the Nigerian government current fiscal position improving IGR is no longer an option among many; it is currently the only one on top