In anticipation of review of the revenue sharing formula scheduled to start on Thursday, there are strong indications that state governors may demand 42 percent of the federal allocation as against the 26.72 percent they currently get.
The present revenue sharing formula was designed during the 1999 to 2007 tenure of former President Olusegun Obasanjo. They are also asking that the share of the Federal Government be reduced from the current 52.68 percent to 37 percent, while requesting that the share of local governments be increased from the current 20.60 percent to 23 percent in the new formula.
A highly placed source who is privy to the pre-meeting discussion of the governors according to PUNCH said,
A committee was set up by the forum and that is the position of the forum on the matter of the revenue formula. The sub-committee met as far back as 2011 and it was made up of six governors, headed by the then governor of Lagos State, Mr Babatunde Fashola. The members were Murtala Nyako of Adamawa State; Sullivan Chime of Enugu State; Babangida Aliyu of Niger State; Rotimi Amaechi of Rivers State and Aliyu Wamakko of Sokoto State.
From the report they submitted to the forum, they recommended that the Federal Government should now get 35 percent; states should get 42 percent and local government should get 23 percent. That was the recommendation and that is what we have continued to push for.
When asked what the governors based their proposal on, the source said they looked at their quest to be able to pay the minimum wage; the need for more resources to fight insecurity and the decaying infrastructure in their domain, which the states do not have the funds to address.
The governors noted that managing states today is becoming very expensive and they mentioned the issue of security. Even though there is a central police system, the responsibility is falling on state governments to inject funds to help the agencies and so they have been involved in one way or the other.
The cost of securing the states has simply become more expensive and the burden is now heavy on the states. The population has also increased over time and these people are in the respective states.
So, when the governors said they needed some adjustments done with the revenue formula in order to defray the increase in the minimum wage, the new formula I mentioned to you was the formula they were referring to. The report was adopted and it was sent to the Federal Government but nothing was done about it.
During the negotiation for this minimum wage, the governors again presented their position. They were initially reluctant to agree to the N30,000 but eventually, that was why they said if it (minimum wage) must be implemented with ease, there must be an adjustment, and so the report was again sent to the Federal Government but nothing was done about it.
When asked if the NGF would stick to the 2011 recommendation, he said,
I’m tempted to say yes, because there had been no cause to reconstitute another committee to review it, so even though it’s relatively old, as far as we are concerned, that is the official position.
Yes, we know there has been this talk about states boosting their IGR and that they should be able to use that to take care of their recurrent expenditure, but the infrastructure for making that happen is not there.
If there is no security and the states are not safe, how do businesses make money and how do you generate revenue from them? The management of the power sector is still substantially controlled at the centre and so if you can do something as a state to address the power problem, it could change a number of things.
On one hand, they are called the chief security officers of their states but on the other hand, the resources they need to make it happen are inadequate. So, we looked at all of these to arrive at that formula and that is our position.
At the National Economic Council meeting on 18 January 2019 comprising state governors, some key Ministries, Departments and Agencies of government, chaired by Vice-President Yemi Osinbajo, state governors had renewed their call for a review of the nation’s revenue sharing formula, saying it was necessary for them to be able to pay the N30,000 new National Minimum Wage.
Meanwhile, members of the Nigeria Governors’ Forum have said they are ready to share their perspectives on how to have a new revenue formula with the revenue commission if invited. Yet Chairman of the Forum and Governor of Ekiti State, Dr Kayode Fayemi, told one of PUNCH correspondents that the NGF had yet to take a common position on the issue.
“No decision on this yet, but if the RMAFC approaches us, we will share our perspective with them” he said.
However, a governor who spoke to Saturday PUNCH on strict condition of anonymity said members of the NGF would soon meet on the matter. He said,
We already have a template. The template is that we want between 40 and 45 percent. This demand is based on realistic responsibilities that have been put on our neck by the constitution. Apart from this, there are instances whereby the Federal Government has abdicated its responsibilities to the states.
For example, states have taken over the funding of police. Apart from the payment of salaries and uniform for the policemen, it is the states that are almost solely responsible for their operations.
We are doing half of that for other security agencies. Look at the roads, states have been responsible for the maintenance and even reconstruction of federal roads in our states as well. Even federal hospitals have been abandoned to us.
The Chairman, Revenue Mobilisation Allocation and Fiscal Commission, Mr Elias Mbam, had on Tuesday revealed that the commission would set up a committee in the coming week to review the revenue sharing formula for federal, states and local governments due to the current economic realities.
Culled from PUNCH.