Recently the call for the review of the revenue allocation formu la has grown louder. It is gratifying to note that the Federal Government through the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) in August had restated its commitment to the review of the extant vertical revenue allocation formula to the three tiers of government in the country. The commission said the review is targeted at equitable distribution of the accrued revenue into the Federation Account to the three tiers of government, and this will be concluded before the end of 2021.
The RMAFC also disclosed that the remuneration review for political and judicial officeholders would equally start as soon as the federal government released fund for it. It is instructive to note that since 1992 the current revenue allocation formula stands at 52.68 percent for the Federal Government, that is including a special fund for the FCT; Ecological, Stabilization and Natural Resources Development Funds. Then 26.72 percent for the states and 20.6 percent for Local Government Areas
However, plans by successive governments to review it have come to naught due to a lack of political will. Interestingly, in recent times, three state governors have lent their voices to calls for the review of the sharing formula. Most recently, Gombe State Governor, Yahaya Inuwa, joined the fray when he called for the upward review of revenue allocated to states. He wondered why states despite the responsibilities of shouldering the needs of the people are left with 26.72 percent.
Similarly, Katsina State Governor Aminu Masari is canvassing for an increase in federal allocation to states and local governments, and maintained that states and local governments areas have more responsibilities which makes them require more percentage from the current revenue formula.
Also, Borno State Governor, Professor Babagana Umara Zulum had urged the federal government to consider an upward review of the present revenue allocation formula for Borno State, because the internally generated revenue of the state has increased and is one of the parameters considered in the revenue sharing formula.
In the considered opinion of this newspaper, we share the sentiment expressed by the state governors given the present realities in the country. No doubt, the biggest challenge facing the country right now is insecurity. Bandits and kidnappers are holding the country by the jugular. This has to stop. We have consistently called for state police to tackle the rising insecurity in the country. Presently, most states would not be able to pay the police in their states as they are even struggling to pay the N18,000 minimum wage. With the review of the formula for states to get the lion’s share, state police would become a reality.
This newspaper has also called for the minimum wage to be moved from the exclusive legislative list and transferred to the concurrent list. In our considered opinion, states should handle the minimum wage. It doesn’t make economic sense for all the states to be paying the same minimum wage. The arrangement ought to be such that each state should have a free hand to negotiate with labour what it can afford to pay.
Also, the allocations to the local governments need to be increased to hasten development at the grassroots. Indeed, most of the development takes place in the states and the local governments. We recall that Senate President, Ahmed Lawan, had said that the security challenges in the country can be attributed to the absence of a functional local government system.
According to him, while the nation’s leaders seek solutions to the security crisis confronting the nation, the Local Government system should not be neglected. Besides, a cross-section of Nigerians has called for the restructuring of the country. While we do not agree to wholesale restructuring, we have consistently called for the tinkering of the constitution.
This Newspaper is for economic restructuring. We strongly suggest that there must be laws that will make the states harness their national resources and develop at their pace. We also recall that a Federal High Court in Rivers state recently had decided that Value Added Tax (VAT) collection should go to states. The Federal Inland Revenue Service (FIRS) has vowed to appeal the ruling by the Rivers State court.
It is from this perspective that we call on the RMAFC to hasten the process of altering the revenue formula. We insist that the states have more responsibilities and should have the lion’s share of the revenue. This is the way to go.