By Bassey Udo
May 12, 2011 11:18PM

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.

Overhaul

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.


http://234next.com/csp/cms/sites/Next/Home/5699860-146/states_demand_equity_fairness_in_revenue.csp

Hmmm this is interesting, issues like this are what bring about development, checking corruption at the state and local government level is another issue. At the meantime i wonder what Jonathan will do

bump

All the shared money goes to the politicians and their cohorts pockets.For real.Ngeria leaders are ruthless gangsters,they don't think for the people,they want the people dead

I hope every state asking for more money is definitely going to immediately generate more for the federal purse too, instead of their usual trick of relying on others like disabled beggars.
This is because, many states are no better than huge cassava farms and have zero plans for the future aside from stretching ever bigger begging bowls.

I propose that we don't waste our time with such high level beggar demands. Instead, we must seek ways to merge unviable states and force each merged state to submit a detailed, viable business plan for its survival.
Any state that cannot meet with the above should be turned into a huge cassava farm; or better still, a nature reserve so foreigners can pay money to see the Worlds laziest bastar'ds in their natural goat ridden habitats. That way, the country can make money from their pimply arses.

Rubbish.

I'm glad that the states have made a united front on this demand. May it come to pass.