The analysts at research company, Data Services and Resources (ADSR) have identified the states with the least capacity to finance the new minimum wage.

According to ADSR, the states that may not be able to finance the new minimum wage are Benue, Osun, Oyo, Kogi and Kano states.

Other states that are having difficulties in paying the new minimum wage are Adamawa, Jigawa, Kebbi, Plateau, Nasarawa, and Ekiti state.

On the other hand, the report disclosed that Lagos, Imo, and Zamfara have the highest ability to pay the minimum wage.

In calculating the states’ ability to pay the new minimum wage, ADSR examined the ratio of personnel expenditures to total expenditures, total revenue, internal revenue, and states’ total debt stock.

They noticed that states with relatively high ability to pay currently have low personnel expenses to total expenditure ratio and low personnel expenses to revenue ratio, especially internally generated revenue, low debt profile, and high elasticity of personal costs contribution to future revenue expenditure.

The research firm’s economists added that increasing the minimum wage would positively impact states’ IGR through personal income tax.

“Government will also need to invest in some capital projects to align with workers’ new pay and show the public the need to raise taxes needed to fund increased spending,” the report revealed.