October 4, 2021

Governor Babajide Sanwo-Olu of Lagos State on Monday 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 Review of Allocation formula by the Revenue Mobilization Allocation and Fiscal Commission (RMADC).


The News Agency of Nigeria (NAN) reports that 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 and the local governments, 20.60 per cent, with 13 per cent derivation revenue going to the oil-producing states.

Sanwo-Olu 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 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 pointed out that there was a need for effective fiscal laws that would ensure a framework for beneficial and dynamic intergovernmental fiscal relations.

“This will help in nurturing strong, transparent, efficient and independent fiscal institutions that will also help in nurturing strong transparent, efficient and independent fiscal institutions.

“This will further ensure accountability and proactively address emerging fiscal challenge in the public sector.

“It is the position of Lagos State Government that State Governments should share 42 per cent of revenue accruing to the Federation Account.

“In addition to the existing items on the concurrent legislative list, the Federal and State government should collectively share the following responsibilities:

“Regulation of labour, mines and mineral, social security and statistical system (census, birth and death etc).

“Guidelines and basis for minimum education, business registration, price control, national parks, fishing and fisheries,”he said.

Sanwo-Olu added: “It is the position of Lagos State that state government should take 42 per cent from the Federation Account and handle the remaining items other than those specifically listed above.

“It is the position of the Lagos State government that Local Government should take 23 per cent and collaborate with the state government in service delivery

“The Derivation and Ecological fund should be de-centralised such that each federation unit will have access to its own reserve whenever the needs arise.

“In other words, the 1 per cent allocated to the Federal Government in respect of the Derivation and Ecological Fund should be deducted from the Federal Government’s share of Derivation and Ecological Fund will now stand at 1.72 per cent.

“The proportion allocated to Stabilization Fund should be increased from 0.5 to 1 per cent. This amount should be deducted from the percentage hitherto allocated to special fund on the development of natural resources,”he said.

Sanwo-Olu also said that the Federal Government should take 34 per cent from the Federation Account and focus exclusively on defense, external affairs, international trade, currency and banking, exchange control and federal trunk roads.

“Others are: shipping, elections, immigration, citizenship, nuclear energy, diplomatic and trade representatives, public debt of the federation, telecommunications, insurance, inter state aviation and railways, meteorology, maritime, shipping and navigation,”he said.

The Federal Commissioner, Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Dr Adekunle Wright, said the two days brainstorming session on how to ensure equitable distribution of Nigeria’s commonwealth would have positive impacts.

“Lagos as much as we know in per square meter is the smallest in Nigeria, but highest in the number of people per square meter, all of these we are taking into consideration and take on board.

“The revenue that Nigeria generates belong to Nigerians, the revenue acruable in Nigeria belong to all, so all of these things have been taking into consideration to ensure fairness.

“We want Nigerians to give us a chance that we are going to do it in a manner that will be fair, equitable and just,”he said.

Speaking, Commissioner for Finance, Dr Rabiu Olowo, said the state was proposing the provision for Special Economic Status and a Review of Revenue Allocation in support of the state.

According to him, It is very important that federal government review the revenue allocation formula of Lagos State because of the high rate of daily influx of population into the state.

“Lagos State is the smallest in the country, but accommodate 10 per cent of the whole population.

“Due to the daily influx, there is need for federal support. Also the state is shouldering so many of the Federal responsibilities.

“Therefore, in line with current realities, it is very important that the federal government review the revenue allocation formula.

He noted that the current revenue allocation formula had not been reviewed in the last 29 years as opposed to the constitution which stated that it should be reviewed every 5 years

He, therefore, expressed appreciation to the Revenue Mobilization and Allocation Fiscal Commission for making it necessary for the discourse on the review to take place.

He said: “There is an aligned position by all stakeholders that the revenue allocation formula should be reviewed in support of the state and local government.

“This is because they are the closest government to the people.

(NAN)

puremaker7:
Let's kuku divide this British private enterprises called Nigeria.

TheSupleemLeada:
I support this. Am a Yoruba from a state that has no crude oil but this would ensure our governors with little natural resources think outside the box and innovate. Plus it's totally unfair for states like bayelsa, rivers and other oil producing states to have their resources enrich other regions at their own expense. Some of these people's lands have been destroyed as a result of crude oil activities in the region yet they get peanuts.... left to me all states should keep 80% of what they generate.

SmartPolician:
This one is confused.
Yesterday, he was crying of restructuring.
Today, he's asking for 42%.
How then will the north take the south seriously?

aremuforlife:

What is restructure?

SmartPolician:


1. Total resource and revenue control by the states
2. State police
3. States paying taxes to the federal government for maintaining the military and a few relevant MDAs.
4. Federal government not having any business with infrastructure
5. Federal government not having any business with power generation, transmission and distribution
6. I can go on and on.

aremuforlife:

You are only smart by half, are you sure we are ripe for what you are demanding for. Ordinary primary and secondary school teachers, our state governments are still owning them. The state police and state military will be used as a political instrument against their various opposition. This will be like the case of deregulation and subsidy removing, we may not know what is coming, until after it has visit us.

Chucks234:
I disagree with Mr Sanwo. He is asking for more allocations to states when they indirectly receive 47% (LG allocation). Also on the influx of people into lagos and the need for FG support which is laughable considering the amount of FG infrastructure in the state (the highest FG presence of any state in Nigeria). A simple breakdown of these infrastructure will help
1. The functional seaports is situated in Lagos built by revenue from other states (eg Groundnut, Cocoa and Crude).
2. The International & Local airport built with revenue from other states.
3. Major highways highways & bridges owned by FG and built with revenue from other states.
4. Unilag, Yabatech, LUTH, FTC & other FG parastatals built by revenue from other states.
5. Railway also built by revenue from other states just to mention a few.
5. Dangote refinery (technically been built by FG because CBN is a major financier of the project) I forsee an FG takeover in the future if he fails to pay his debts.

So LASG should show us what thay have used the allocations since capital was moved to Abuja in 1993 to do. In 22yrs how many new infrastructure has been built in Lagos by successive governors? They scream we have the highest IGR but forget to acknowledge that this IGR is driven by FG infrastructure in the state which other states do not have the luxury of getting.

Imagine a scenario where imports into the country is evenly distributed amongst the sea ports in the country, with same amount of FG infrastructure in all states we won't be hearing this nonsense from Mr governor.

SmartPolician:


I am afraid you don't have sense. My argument is that they should stick to one demand so as to be taken seriously.

They cannot keep dancing up and down like a simple pendulum and expect those who oppose their demands to take them seriously.

I cannot believe that a nitwit like you is attacking me for asking your demigod to stand firm on their demands.