States demand 42% federal allocation

THE agitation for a new revenue allocation formula has begun in earnest with recommendations by state governors to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on the nature of new revenue allocation formula they want for the three tiers of government.

The Nigeria Governors’ Forum had in its meeting months ago agitated for 42 per cent  as recommended by the committee it set up.

Chairman of the Accountant General for the states, Mr Tunde Abdulkareem , answering questions from reporters shortly after the June meeting of the Federation Accounts Allocation Committee (FAAC), disclosed that because of the issues relating to the payment of the N18,000 national minimum wage, states have made recommendations to RMAFC on their preferred revenue formula to serve as a working document for the revenue allocation body.

Though Mr  Abdulkareem declined to say the exact figure contained in the states’ presentation, the Nigerian Tribune learnt that it would be in tandem with the 42 per cent recommended by the Governors’ forum’s committee.

Though the governors may have recommended 42 per cent, the figure is not sancrosant as  RMAFC, after putting in its own input based on its field work and examination of various indices, would send the document in form of a bill to the National Assembly for passage.

Earlier, the acting chairman of FAAC and the Permanent Secretary, Federal Ministry of Finance, Alhaji Danlami Kifasi, had told Finance correspondents that the federation account recorded a shortfall of N162.110billion and had to be taken from the Excess Crude Account to ensure that the three tiers of government shared the budgeted N554.150 billion.

The Federal Government received an allocation of N260.187 billion, representing 52.68 per cent; states got N131.970 billion (26.72 per cent) while the 774 local government councils in the country shared N101.744 billion (20.60 per cent) among themselves.

The oil-producing states also shared N60.249billion among themselves as part of the 13 per cent derivation fund.

For the month under review, the acting FAAC chairman said the net revenue from the Value Added Tax available for sharing among the three tiers of government was N61.607 billion, as against N42.564 billion shared in the preceding month.

Out of this VAT, the Federal Government got N9.241billion, representing 15 per cent; states were allocated N30.804 billion (50 per cent) while the local government councils received N21.562 billion, representing 35 per cent of the total VAT proceeds.