Thirty-three states and the Federal Capital Territory (FCT) are united in their opposition to more cash for Lagos, Kano and River states in the proposed Revenue Formula, it was learnt yesterday.

The three states are being considered for a larger share of the national revenue because of their high-yielding Internally Generated Revenue (IGR) profile.

But, the 33 states and the FCT are insisting on the present formula for the sharing of the IGR.

The sharing formula for the 10 per cent IGR by the states is equality (7.5 per cent) and efforts (2.5 per cent).

The Revenue Mobilisation Allocation and Fiscal Commission(RMAFC) is weighing the options on how best to resolve the matter.

The IGR is one of the five principles being applied to revenue sharing among the states with a 10 per cent weight attached to it.

Investigation showed that although most states want more revenue, they do not want the IGR shared based on their performance.

A source, who spoke in confidence, said: “The states (like Lagos , Rivers and Kano ) that are doing well in revenue generation are also insisting that each state should be rewarded by what it generates internally.

“Most of the 33 states, which are rated as “rural” are opposed to performance as the basis for sharing the 10 per cent IGR. I think they want to be protected by states with huge revenue base.

“So, even among the states, there is a subtle cold war over how the IGR should be managed or shared. It is a scenario that RMAFC is confronted with.

“It has been difficult to reconcile these two positions over the years. But with the latest field work being done by RMAFC, the commission will weigh all the indices.

“All the states and 774 local government areas also have opportunity to air their views on this matter. RMAFC will consult extensively on this new revenue allocation formula.”

An RMAFC memo obtained by The Nation gives graphic details of the conflict among the states and local government areas on IGR.

The memo also suggested that RMAFC may look at the issue, which is causing friction among the states.

The document reads: “As members may be aware, Internally Generated Revenue (IGR) is one of the factors used on the Horizontal Revenue Formula which is the formula used in sharing revenue amongst the states and Local Government Areas. The weight assigned to the IGR factor is 10 per cent of the Federation Account.

“The factor was introduced sometime in 1991 and the idea it was to encourage and reward States and Local Governments that look inwards in terms of their financial needs instead of relying mainly on the monthly allocations from the Federation Account.

“When the factor was first applied in 1991, the Commission used absolute quantum of IGR by States and Local Governments as proxy in allocating revenue under the factor. “This approach was greeted with protests from most of the states as Lagos, Rivers and Kano States were taking more than 50 per cent of the total allocation under IGR.

“Based on the protests, Decree 102 of 1992 (now Act) introduced ‘internal revenue effort’ as the proxy to be applied instead of using the absolute quantum of IGR. That approach too was found to be lopsided as States with smaller revenue base were benefiting much more than those with larger revenue base and capacities.

“Specifically, the ‘rural States’ were getting twice the allocation of states like Lagos , Kano and Rivers states .

“After using the two extremes, the military government at that time had to find a middle ground in solving the problem. Consequently, it directed that the 10 per cent be divided into two parts namely; equality (7.5 per cent) and efforts (2.5 per cent) and applied in allocating revenue under the factor. Since then the Commission has been using equality and efforts in all its Indices reviews.

“However, members may also wish to be informed that after the 2006 Indices review, the Commission received several complaints from States and Local Governments arguing that the Commission was actually rewarding equality and not IGR efforts as originally intended in the Act.

“The Commission in Plenary, after studying the complaints, agreed that in all subsequent reviews the entire 10 per cent be applied, using internal revenue effort.

“This decision may not solve the problem because the states with lower revenue base and capacities are still going to get more allocation under the factor than those with larger revenue base and capacities.

“For example, if Ebonyi State can generate N1.5 billion this year, it will be easier for the state to double the figure next year to N3 billion and get 100 per cent effort than for Lagos State to double its N20 billion naira to N40 billion the following year. Perhaps Lagos State might end up getting 20 per cent effort, thereby putting it at a disadvantageous position. At any rate, the law is very clear and the Commission should be seen to be acting in accordance with the law.

“However, the Commission may consider this issue in the ongoing process of reviewing the Revenue Allocation Formula.”


http://www.thenationonlineng.net/2011/index.php/news/44343-33-states-oppose-more-cash-for-lagos-rivers-kano.html

Here we see states like Delta, Edo, Ogun, Ondo, Anambra and even almighty Kaduna being in the same page as their parasitic counterparts from the north all because of AWUF MONEY!!!.

Demdem: lets go back to regional govts with each region each controlling its resources.

Can't u see that the Let-Nigeria-Break up states are the one opposing real independence of our states here.

Naija...

We all act like we are ready for a regional set up but deep don everyone is opposed to such

Standing5: We all act like we are ready for a regional set up [b]but deep don everyone [/b]is opposed to such

i disagree with that

Standing5:

Can't u see that the Let-Nigeria-Break up states are the one opposing real independence of our states here.

...........................

True federalism, resource control.....the only way out of this mess, there is no magic GEJ or anyone else can do, as long as the system encourages laziness..