Sanwo-Olu reveals importance of 42% revenue allocation to states

Sanwo-Olu reveals importance of 42% revenue allocation to states

Gov. Babajide Sanwo-Olu of Lagos State on Monday, October 4, advocated an upward review to 42 per cent of the revenue accruing to states from the Federation Account.

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 the Review of Allocation formula; by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC).

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The two-day event, held at Victoria Island, Lagos, had in attendance all the representatives of the South-West states.

Under the current revenue sharing formula, the Federal Government takes 52.68 per cent; the states 26.72 per cent; as well as the local governments, 20.60 per cent, with 13 per cent derivation revenue going to the oil-producing states.

Sanwo-Olu also 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 also 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 also pointed out that there was a need for effective fiscal laws that would ensure a framework; for beneficial as well as dynamic inter-governmental fiscal relations.

 

 

 

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