Lagos State Governor Babajide Sanwo-Olu has called for an upward review to 42 per cent the revenue accruing to states from the Federation Account.
Governor Sanwo-Olu said that an upward review to 42 per cent would enable the states to cater for their rising responsibilities.
Sanwo-Olu made the call at a two-day South-West Zonal public hearing on Review of Allocation formula by the Revenue Mobilization Allocation and Fiscal Commission (RMADC).
Under the current revenue sharing formula, the Federal Government takes 52.68 per cent, the states 26.72 per cent and the local governments, 20.60 per cent, with 13 per cent derivation revenue going to the oil producing states.
Sanwo-Olu stated that the present revenue sharing formula among the tiers of government which became operational about 29 years ago was long overdue for amendment.
“Nigerian fiscal federalism should be adjusted to develop more expenditure responsibilities with appropriate revenue allocation to lower levels of government.
“So that federal government will focus on matters of national concern like security and defense, among others.
“The Lagos State Government proposed revenue allocation formula: Federal government: 34 per cent, State government 42 per cent, local government councils: 23 per cent and Lagos State (Special Status, 1 per cent).
“The solution is to diversify and strengthen the fiscal base of the state government. The need to reverse the age-long fiscal dominance by the federal government in order to re-establish a true federal system is strongly recommended.
“It is the state’s position that state government should be granted the highest share of 42 per cent, while the share of the Local government be increased to 23 per cent since both tiers of government are closer to the people,”he said.
The governor pointed out that there was a need for effective fiscal laws that would ensure a framework for beneficial and dynamic inter governmental fiscal relations.
Sanwo-Olu also said that the Federal Government should take 34 per cent from the Federation Account and focus exclusively on defense, external affairs, international trade, currency and banking, exchange control and federal trunk roads.
The Federal Commissioner, Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Dr Adekunle Wright, said the two days brainstorming session on how to ensure equitable distribution of Nigeria’s commonwealth would have positive impacts.
“Lagos as much as we know in per square meter is the smallest in Nigeria, but highest in the number of people per square meter, all of these we are taking into consideration and take on board.
“The revenue that Nigeria generates belong to Nigerians, the revenue acruable in Nigeria belong to all, so all of these things have been taking into consideration to ensure fairness.
“We want Nigerians to give us a chance that we are going to do it in a manner that will be fair, equitable and just,”he said.
Speaking, Commissioner for Finance, Dr Rabiu Olowo, said the state was proposing the provision for Special Economic Status and a Review of Revenue Allocation in support of the state.
According to him, It is very important that federal government review the revenue allocation formula of Lagos State because of the high rate of daily influx of population into the state.
He noted that the current revenue allocation formula had not been reviewed in the last 29 years as opposed to the constitution which stated that it should be reviewed every 5 years
He, therefore, expressed appreciation to the Revenue Mobilization and Allocation Fiscal Commission for making it necessary for the discourse on the review to take place.
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