Economy

North West demands lion share of revenue allocation for states, LGAs

Access Bank
The North West zone on Monday demanded the lion share of revenue allocation for both State and Local Government Areas, saying that the two arms of government should take 60% while the Federal Government takes 40 percent.

The North West zone consists of seven states of Kaduna, Kano, Katsina, Sokoto, Jigawa, Kebbi and Zamfara.

In their respective presentation at the zonal public hearing on the review of the current Revenue Allocation Formula, the state representatives noted that the second tier of government is also saddled with funding of security apparatus which is the sole responsibility of the Federal Government.

Kano State, for instance, expressed worry that the Federal Government is taking too much of the Revenue than the States and Local Government Areas.

The Secretary to Kano State Government, Alhaji Usman Alhaji, said the “Federal Government should take 41 percent, States 34 percent, LGAs 24 percent and we need an independent one percent for Kano State because it is a mini Nigeria.”

Katsina State also called for 35 percent for states, 25 percent for local government and 40 per cent for Federal Government.

According to Katsina State Commissioner for Budget and Economic Planning, Alhaji Farouk Jobe, “the revenue allocation was long overdue and its review is timely because it is getting to 30 years that the allocation was reviewed.”

Jigawa State Commissioner for Finance and Budget Alhaji Ibrahim Babangida Umar also said that States and Local Governments should take lion shares of the allocation for rapid development, giving the Federal Government 44 per cent, states 34 per cent and Local Government 22 per cent

Kaduna state Permanent Secretary, ministry of finance, Mohammed Shuaibu said, “Certain percentage be set aside for poverty/insecurity ridden States, and 13 per cent derivation should remain, but extend to mineral resources also.”

In his keynote address at the event, Kaduna State Governor Nasir El-Rufai, who was represented by his deputy, Dr Hadiza Balarabe, said: “Our reality is that the Federal Government has since the late 1960s acquired powers and resources similar to those exercised by the sovereign in unitary systems. Most of the 36 states rely on the revenues from the Federation Accounts Allocation Committee (FAAC).

“The Federal Government retains the largest chunk of federation resources. It does too much but is too stretched and so does little well. Yet, the things that really matter to citizens are state and local government functions. For instance, basic and secondary education, primary health care and agriculture are subnational responsibilities. But the way things are, many states have to support the federal security agencies deployed within their jurisdictions, despite the fact that security is a federal responsibility.

“Therefore, the argument for a significant review, in favour of states, of the vertical revenue allocation formula is compelling. The Federal Government has to consolidate its focus around security, foreign affairs and monetary and fiscal policy. It should allow the states and the local governments to get more revenues to deliver better governance at the grassroots.

“The APC True Federalism Committee, which I chaired, had recommended a review of the revenue allocation formula in favour of the states. In my view, this is the most efficient way to adjust the finances of the federation while transiting to a wider devolution of powers and responsibilities.

“I do not wish to preempt the submissions that the states in this zone will be making at this event. But I will state that the progress and development of our country depends on well-functioning states. The revenue allocation formula is critical to that,” he said.

Meanwhile, in his open remarks, Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engineer Elias Mbam gave reasons why revenue allocation remained unreviewed for 29 years contrary to Constitutional provisions of every five year review.

Engineer Mbam disclosed that due to socio-economic and political changes in the country, the allocation was last reviewed in 1992.

“As you may all be aware, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) by virtue of paragraph 32 (b), part 1 of the Third Schedule to the 1999 Constitution of the Federal Republic of Nigeria ( As Amended) is empowered, to review from time to time the Revenue Allocation Formula and principles in operation to ensure conformity with changing realities, provided that any Revenue Formula which had been accepted by an Act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the Act.

“In line with the above constitutional provision and the fact that there had been several socio-economic and political changes in the country since the last review in 1992, the Commission has commenced the process of reviewing the subsisting revenue allocation formula to reflect these changing realities.

“Accordingly, the Commission has designed processes and guidelines to ensure adequate participation of Nigerians. In this regard, the Commission has undertaken sensitisation visits to all the States and Local Governments to make sure that the generality of Nigerians participate in the process,” the RMAFC boss said.

Daily Sun

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