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General News of Tuesday, 5 October 2021

Source: ripplesnigeria.com

Sanwo-Olu advocates 42% revenue allocation to states

Babajide Sanwo-Olu Babajide Sanwo-Olu

The Lagos State Governor, Babajide Sanwo-Olu, on Monday called for an upward review of the revenue accruing to states from the Federation Account to 42 percent.

Sanwo-Olu, who made the call at a two-day South-West Zonal public hearing on the Review of Allocation formula by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) held in Victoria Island, Lagos, said Sanwo-Olu said the review would enable the states to cater for their responsibilities.

Under the current revenue sharing formula, the Federal Government takes 52.68 percent, the states 26.72 percent, and the local governments receive 20.60 percent, with the oil-producing states getting 13 percent as derivation revenue.

The governor stressed that the present revenue sharing formula which became operational in 1992 was long overdue for amendment.

He said: “Nigerian fiscal federalism should be adjusted to develop more expenditure responsibilities with appropriate revenue allocation to lower levels of government.

“This will allow the federal government to focus on matters of national concern like security and defense, among others.

“The Lagos State government proposed revenue allocation formula: Federal Government (34 percent), states (42 percent), local government councils (23 percent), and Lagos State (Special Status, 1 percent).

“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 percent, while the share of the local government be increased to 23 percent since both tiers of government are closer to the people.”

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