Governors are pushing for a review of the revenue allocation formula because states bear heavier burdens, Nigeria Governors Forum (NGF) said on Monday.
NGF Chairman Kayode Fayemi said states no longer want handouts from the Federal Government but request to be allocated what should be their entitlements.
He said the demand for a new formula was not informed by the challenges of paying the N30,000 minimum wage.
Fayemi added that since the Federal and state governments have separate revenue formula preferences, it is the duty of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to make a proposal for consideration.
The Ekiti State governor spoke exclusively with The Nation following his remarks at the Aso Villa after a meeting with President Muhammadu Buhari.
He said: “We believe the revenue formula should change in view of the realities on ground. States are bearing more responsibilities, including funding primary/ basic education, primary health care and even reconstructing roads which are called federal roads of which refunds were yet to be made.
“We cannot have a tyranny of unfunded mandate in federating units. We think the mandate should be funded.”
An unfunded mandate is when a new piece of federal legislation requires another entity to perform functions for which it has no funds.
Fayemi said the rights of states as equal stakeholders should be protected and guaranteed.
He added: “We are contributors to the nation’s revenue, we are not just takers. States do not want handout, they want what they are entitled to.
“So, it is about our federalism. It is about the federating units. We need to look at the responsibility each unit has been given and the resources to be allocated to each unit. It shouldn’t be about giving handout to states; they want what they are entitled to.
“We want new revenue formula because fundamentally, it is the right thing to do.”
Asked to be specific on the new revenue formula desired by the governors, he said: “We may have our own preference, the Federal Government may have its own preference, other stakeholders may have their own preference, it is not for any of us to dictate. That is the basis for RMAFC to do its job.”
He also clarified that the call for a new formula has no connection with the payment of the new minimum wage by states.
He said: “It was not informed by the challenges of paying the new minimum wage.
“Negotiation is going on in states and progress is being made. It is about the responsibility of the federating units and corresponding resources.”
He said the demand of the governors was not targeted at the President.
“This has nothing to do with President Muhammadu Buhari, the agitation for new revenue formula has been on since the administration of ex-President Olusegun Obasanjo.
“In fairness, the President has been more sympathetic to states with bailout funds. But he is dealing with a structure that he has been bequeathed.”
Ex-President Olusegun Obasanjo in 2002 invoked an Executive Order to allocate the revenue as follows: FG (54.68%), States (24.72%) and Councils (20.60%).
In March 2004, the then Minister of Finance, Dr. Ngozi Okonjo-Iweala issued a letter modifying the Executive Order that increased state allocation to 26.72% and reduced Federal Government’s share to 52.68%.
RMAFC in September 2004 submitted a new formula to ex-President Olusegun Obasanjo, who forwarded it to the National Assembly for consideration in line with Section 162(2) of the 1999 Constitution.
The proposal with the National Assembly made the following recommendations:
Federal Government (53.69%); States (31.10%); and Local government Areas (15.21 %.).
Out of the Federal Government’s’s allocation, 6.5% is reserved for Special Funds, leaving it with 47.19%
The breakdown of the 6.5% includes Ecological Fund (1.50%); Solid Mineral Fund (1.75%), National Reserve Fund (1.50%) and Agricultural Development Fund (1.75%).
It was learnt that at present, the revenue allocation formula is as follows: Federal Government (52%); States (26.72%); and 770 Local Government Areas (20.60%).
But the governors raised a six-man committee, which was then headed by a former Governor of Lagos State Babatunde Raji Fashola.
Other members of the committee were ex-governors Murtala Nyako; Sullivan Chime; Babangida Aliyu; Rotimi Amaechi; and Aliyu Wamakko.
The panel recommended the sharing formula as follows: Federal Government (35%); States (42%); and Councils (23%).
It was learnt that the committee’s recommendation was still subsisting as at press time. (The Nation)
