States demand equity, fairness in revenue sharing formula

States demand equity, fairness in revenue sharing formula

The thirty-six
states of the federation yesterday, renewed their demand for a complete
review of the formula in the sharing of revenue between the three tiers
of government on the basis of equity and fairness.

Chairman of Finance
Commissioners Forum, Rebo Usman, told reporters at the end of the
Federation Accounts Allocation Committee (FAAC) meeting in Abuja that
it is unfair for the federal government to continue taking the lion’s
share; 52.68 percent from all revenues accruing in the federation
account, leaving the states and local governments with 26.72 percent
and 20.6 percent allocation respectively.

Usman, who spoke on
behalf of the finance commissioners from all the states of the
federation, described the existing allocation formula as not only
unfair and archaic, but a creation of the military that should be done
away with.

“Our position has
always been very clear. We have made a submission to the federal
government through our governors that there is the need for us to
change this archaic revenue sharing formula. What we are using now is a
creation of the military regime, with little modifications. It is very
unfair to the states and local governments that up to date, we are
still making use of this formula, which is a creation of the military,”
he said.


He said the
personnel cost of all the states and local governments far outweigh
that of the federal government, pointing out that in the interest of
equity, it is fair for the revenue formula to be completely overhauled
in favour of the states and local governments to enable them deliver
their responsibilities to the people at grassroots where the bulk of
Nigerians reside.

“The revenue formula needs to be completely overhauled, not just amendments here and there,” he maintained.

On the
controversial N450 billion debt by the Nigerian National Petroleum
Corporation (NNPC) to the federation account, Mr Usman said that for
the first time, the corporation has accepted its obligation, and is
making efforts to repay, saying that high-level meetings were going on
to finally lay the issue to rest.

“One good thing
that happened today was that at least, for the first time, NNPC was
remorseful about the whole issue and categorically stated that they
were aware of the indebtedness to the Federation, and that already
high-level meetings were going on to try to resolve the issue. This was
captured in the minutes. So, with that statement we were comforted that
by the next meeting, the corporation will fulfil its promise to pay
up,” he noted.

Meanwhile, Minister
of State for Finance, Hajiya Yabawa Wabi, said a total of N455.596
billion shared among the three tiers of government. “Total amount
distributed was N455.596 billion, made up of statutory of N309.944
billion; VAT N42.564 billion, and augmentation figure of N103.018
billion,” she said.

Details of the
distribution, the minister said showed the federal government getting
N147.681 billion, or 52.68 percent, states shared N74.806 billion, or
26.72 percent and local governments N57.749 billion, or 20.6 percent,
while derivation payment to oil producing states was N29.608 billion.

Reduced revenue

Acting Accountant
General of the Federation (AGF), Aderemi Ogunsanya, said gross revenue
for the month of April declined by N32 billion, or 5.2 percent, from
N615.06 billion generated in March to N582.97 billion, owing to reduced
oil production. The reduction was attributed to the complete shutdown
of the Bonga oil terminals for maintenance work as well as the on-going
repairs at the Qua-Iboe, Akpo and Amenam terminals. To this end, the
AGF said the committee decided to withdraw N103.09 billion from the
excess crude account to augment the shortfall in distributable revenue.

Though the
distributable revenue increased by N31.01 billion, or 7.31 percent
compared to the figure in March, there was additional N1.35 billion in
exchange gain from the differential between the prevailing exchange
rate of N152.18 per dollar and the budgeted rate of N150 per dollar set
as benchmark. The exchange rate difference has been escrowed pending
the approval of the budget.

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