State Capacity and Revenue Mobilisation in Nigeria’s Non-Oil States: A Governance Analysis

This study analyses the governance conditions that enable or constrain internally generated revenue mobilisation in Nigeria's non-oil states, examining why some states have successfully expanded their own-source revenue base while others remain heavily dependent on federal transfers. Nigeria's fiscal dependence on oil revenues has made state governments vulnerable to price shocks, and the development of robust non-oil revenue systems is widely identified as a governance priority. Using a comparative qualitative analysis of four non-oil states, Anambra from the South East, Oyo from the South West, Kano from the North West, and Kwara from the North Central geopolitical zone, the study examines the state capacity factors, political economy conditions, and administrative reforms associated with revenue performance differences. The state capacity theory, the political settlement framework, and the revenue administration literature are applied to explain variation in revenue mobilisation outcomes. Findings reveal that successful non-oil revenue mobilisation is associated with a combination of political will to reform revenue administration, investment in tax authority institutional capacity, and the existence of a sufficiently diversified economic base to tax. States with politically powerful informal sector elites that resist formalisation face greater political barriers to revenue expansion than states with more organised formal sector economies. Recommendations include revenue administration reform technical assistance with sustained government commitment, taxpayer education campaigns, and structured coordination between state internal revenue services and the Federal Inland Revenue Service. Keywords: state capacity, revenue mobilisation, non-oil states, internally generated revenue, fiscal governance