- This is time to speed up development by ceding more funds to states and local governments
The current formula for sharing the revenue accruing to the Federation Account is lopsided in favour of the Federal Government. The lion’s share of the revenue goes to the Federal Government while the other tiers of government, that is, the states and local governments, are left to pick the crumbs. This has led to a lot of resentment in the country and continues to squeeze the governors who are left to face the anger of the people and workers due to paucity of funds.
The formula that allocates 52.68 per cent of all revenue in the Federation Account to the Federal Government leaves the 36 states with 26.72 per cent and the 774 local government councils with 20.60 per cent. This is certainly not a formula for development. The people live in the states and the grassroots supervised by the local councils.
They know the needs of their people better, and the constitution vests the land in the states. Yet, the funds are controlled at the centre where they are snapped up by the bureaucracy. Bureaucrats and politicians who cannot be easily held accountable by citizens sit over the revenue raked up from the states and, in many cases, even workers are unable to receive their due wages.
It has been argued many times that governors should be more creative and productive in baking the national cake rather than waiting for the Federation Account Allocation Committee to give money to them monthly. This is a valid argument as all tiers of government have been rendered lazy by the dollars accruing from petroleum resources.
But, even other sources of revenue that the states could have exploited are placed on the Exclusive Legislative List of the 1999 Constitution which only the Federal Government can legislate on. Solid minerals, for example, that abound in all the states of the federation are under the control of the Federal Government that has felt too comfortable to explore and exploit them. Only private concerns, mainly foreign, that found ways of obtaining licence from the Federal Ministry of Solid Minerals are aided to exploit the resources.
Other sources like the Value Added Tax are paid into the Federation Account. It is sickening that while the lopsided allocations are justified by the 68 items on the Exclusive Legislative List, poor governance at that tier of government has left the states in most cases to fund federal responsibilities. Security institutions, for example, are left for the states to fund in the interest of the people who otherwise would be left at the mercy of criminals.
Operational funds for the police and military are seldom released, and given the precarious security situation, governors are left with no choice but to source funds to keep them going. Other federal agencies and institutions are always appealing for support from the states. But, when as a result of the drain states are unable to perform their statutory roles, they become beggars. Development has become stultified, thus leaving Nigeria as one of the poorest countries in the world.
It is gratifying that both the executive and legislative arms of the Federal Government have now seen reason with the Nigeria Governors Forum and even the Revenue Allocation, Mobilisation and Fiscal Commission (RMAFC) that have regularly called for a review of the revenue sharing formula. The Federal Government should see this as an urgent assignment in the interest of Nigerians. Governance is about development and Abuja is too far from the people to fulfill their desires.
This issue must be placed prominently on the Legislative Agenda of the 9th National Assembly. Unless this is done, another golden opportunity to lift Nigeria into the club of fast developing countries would have been missed. The formula should be reversed with 52 per cent going to the states and 26 to the Federal Government while the constitution is reviewed to cede many items on the exclusive list to states.