The federal government has proposed 3.13 percent revenue increase to the local government allocations.
By this proposal, the federal government will shade-off 2.03 percent of its allocation and the states will cede 1.1 percent all in favour of the local governments.
The federal government’s position was disclosed by the Secretary to the Government of the Federation, Mr. Boss Mustapha, at a town hall meeting on the review of the Nigeria’s vertical revenue allocation formula held in Abuja on Tuesday.
The town hall was conveyed by Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC).
Although the federal government is willing to concede more money to the LGAs, it is also advocating that some of the items on the Exclusive List be taken off to ease some of its burden.
“As an interim and immediate measure, the Federal Government, is therefore, proposing the following: Federal Government 50.65%; State Government 25.62 %; Local Government 23.73% and Derivation Allocation 13 %” Mr. Boss Mustapha said.
The present vertical Revenue Allocation Formula is: Federal Government 52.68%; State Governments 26.72%; Local Governments 20.60% and Derivation Formula 13%.
The SGF noted that the “revenue allocation should be done constructively in the face of dwindling national revenue base and the imperative for states to generate their IGR. Equally important is the fact that this review should culminate in improved national development.” – Daily Trust.
