The Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has begun the process for the review of the revenue allocation formula with a two day zonal public hearing in Lagos.
The revenue allocation formula was last reviewed in 1992 as against the stipulation in the Constitution that it should be reviewed every five years.
While declaring the two day public hearing open in Victoria Island area of the State, Governor Babajide Sanwo-Olu urged participants to handle the national assignment with an open mind to ensure that the right parameters are factored into the historic process.
Governor Sanwo-Olu told the participants that the best way to guarantee national progress and development is by paying attention to subnational development, because the national is a summation and a reflection of the subnational.
The Governor who described the event as a most welcome development which will expectedly guide the Commission in effectively and justly discharging its constitutional mandate, stressed that the need for a new revenue sharing formula among the three tiers of government is very straightforward and self-justifying, and in no way controversial.
He said “Our demand is a sharing formula that is just, fair and equitable; reflecting the contribution of stakeholders to the common purse; and also one that enhances the capacity of State and Local Governments to deliver high-quality services and the full dividends of democracy to the greatest number of our people”
Governor Sanwo-Olu also used the opportunity to renew the call for Lagos to be accorded a special status in recognition of its huge financial commitments to infrastructure and provision of basic amenities for the increasing population of its residents, as well as its preeminent contribution to the national coffers.
“Lagos State is no doubt the nation’s commercial capital, and population center. The level of funding required to service the State’s social and public infrastructure is so significant that it will be difficult for the State to bear the burden for much longer under the present arrangement.
I should say that it will actually be unfair to expect the State to bear this heavy burden on its own. It is therefore necessary to give due consideration to all the variables that support our advocacy for a Special Status” he emphasized
In his remarks, RMAFC Chairman, Mr. Elias Mbam said the public hearing would also be replicated in the other five geo-political zones.
Mr. Mbam explained that the Commission had also placed advertisements in the media calling for memoranda on the review of the allocation formula from Stakeholders and assured participants that justice would be done to their submissions
“The Commission had commenced the process of reviewing the subsisting Vertical Revenue Allocation Formula in line with changing realities. The last review was in 1992. In view of the the sensitivity and it’s Socio-economic importance, the review has become necessary to ensure fairness, justice and equity” Mr Mba assured
In an address of welcome, the Lagos State Commissioner for Finance, Dr Rabiu Olowo, emphasized that as it is, the current sharing formula can no longer subsist.
Mr Olowo canvassed the introduction of population density as a matrix for the revenue sharing formula.
The Commissioners for Finance from Ogun, Oyo, Osun, Ekiti and Ondo States who also made submissions highlighted the needs for a review of royalties from natural resources as well as the sharing revenue allocation sharing formula in a way that the Federal government would take 35%, States should be allocated 40%, while Local Governments should get 25%, as well as the review of special funds amongst other recommendations.
The public hearing continues tomorrow (05/10/21) with interest groups expected to make their own submissions.