Governors of the Southwestern region of Nigeria have said that the time to review the fiscal mobilisation allocation formular of the States and Local Government areas is now.
At a 2-Day Southwest zonal public hearing on the review of the revenue allocation formula, organised by the Revenue Mobilisation Allocation and Fiscal Commission RMFAC, participants agreed that there was a need for upward review of the State and Local Government revenues.
The public hearing is on the review of the mobilisation allocation formular which was last reviewed 29 years ago as against the constitution recommendation of a five year review.
Speaking at the event, the Lagos State Governor, Mr. Babajide Sanwo-Olu said that the need for a new revenue sharing formula among the three tiers of government is very straightforward and self-justifying, and in no way controversial.
Governor Sanwo-Olu believes the public hearing will result in a fundamental alteration of the current revenue sharing formula, in favor of one that is truly fair and equitable, and that takes into full consideration the specific and more pragmatic fiscal contexts of the sub-national governments of the Federation.
“Since the agitation for a reconsideration of the current revenue sharing formula began, this forum, designed to give all stakeholders the opportunity to express their views, promises to be the most encouraging response so far, by the Commission.
”It is therefore a most welcome development. We all expect that it will guide the Commission in effectively and justly discharging its constitutional mandate.”
“Our demand is a sharing formula that is just, fair and equitable; reflecting the contribution of stakeholders to the common purse; and also one that enhances the capacity of State and Local Governments to deliver high-quality services and the full dividends of democracy to the greatest number of our people.” he said
He stressed that the national is a summation and a reflection of the subnational, so attention must be focused to the subnational development which according to him is the best way to guarantee national progress and development.
The Governor who also called for the State to be accorded special status in recognition of its huge financial commitments to infrastructure and provision of basic amenities for the increasing population of its residents, as well as its preeminent contribution to the national coffers said that
He maintained that Lagos State remains the nation’s commercial capital, and population center and the level of funding required to service the State’s social and public infrastructure is so significant that it will be difficult for the State to bear the burden for much longer under the present arrangement.
Governor Sanwo-Olu advised the participants to handle the national assignment with an open mind to ensure that the right parameters are factored into the historic process.
A Necessity
The Chairman RMAFC, Mr. Elias Mba said the review has become necessary to ensure fairness, Justice and equity as the public hearing would also be replicated in the other five geo-political zones.
Mr. Mba explained that the Commission had also placed advertisements in the media calling for memoranda on the review of the allocation formular from Stakeholders and assured participants that justice would be done to their submissions
According to him “the Commission had commenced the process of reviewing the subsisting Vertical Revenue Allocation Formula in line with changing realities. The last review was in 1992. In view of the the sensitivity and it’s Socio-economic importance, the review has become necessary to ensure fairness, justice and equity” Mr Mba said.
Overstretched Infrastructure
The Lagos State Commissioner for Finance, Dr Rabiu Olowo, emphasized that as it is, the current sharing formula can no longer subsist, stressing for a review that should be of gross benefits to Lagos.
Mr Olowo canvassed the introduction of population density as a matrix for the revenue sharing formula which will cater for the over stretched infrastructure such as security, health, education among others.
The Commissioners for Finance from Ogun, Oyo, Osun, Ekiti and Ondo States who also made submissions highlighted the needs for a review of royalties from natural resources as well as the revenue allocation sharing formula in a way that the Federal government would take 35%, States should be allocated 40%, while Local Governments should get 25%, as well as the review of special funds amongst other recommendations.
Hauwa Abu
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