Speaking on Thursday at the event held at Adeyemi-Bero Hall, Alausa, Ikeja, the Commissioner for Finance, Dr. Rabiu Olowo said the workshop is a follow-up to several stakeholders’ engagements held in the past to address the current Revenue Allocation Formula (RAF) that attributed ‘the lion share’ (52.68%) of our ‘commonwealth’ to the Federal Government while the balance is to be shared among other federating units in a technically competent manner.
Olowo, who was represented by the Accountant-General and Permanent Secretary of the State Treasury Office (STO), Dr. Abiodun Muritala, reiterated the need to ensure equitable distribution of ‘National Wealth’ which is the key essence of democratic governance. He stated that the review of the Revenue Allocation Formula (RAF) has been codified under section 32(b) part 1 of the third schedule to the 1999 Constitution FRN and the workshop is geared towards fulfilling the statutory requirements.
In his words: “The first most important phase in the sharing of federal allocation is the distribution among the three tiers of government in a manner prescribed by the law. This is called the vertical method of revenue allocation. Thus, the Federal government takes 52.68%, the States Government takes 26.72% and the Local Government is left with 20.60%. This seems unambiguous but clearly inequitable”.
“The second phase is called the horizontal method and it involves the sharing of the amount (26.72%) allocated to State Government among all the 36 States and the amount (20.60%) allocated to Local Government among all the 774 Local Governments. Under this method, several criteria (called indices) are applied to determine who gets what. These criteria include Population, Landmass, Revenue Efforts, Capacities of Public Health facilities and Capacities of Public Schools”, he added.
The Commissioner further reiterated that it is expedient that all stakeholders faithfully play their parts in this long chain of historic events, noting that the only time Nigeria ‘democratically’ reviewed its Revenue Allocation Formula (RAF) was in 1981. Other reviews are either through military decrees (Y1990 and Y1992) or via executive orders (Y2002 and Y2004).
Olowo emphasised that the Lagos State Government has played its part by providing this opportunity (workshop), in addition to having an unprecedented level of fiscal sustainability as well as shouldering immense federal responsibilities on infrastructural deficits. He stated that the stakeholders’ engagement is an opportunity to re-write history and ensure the statistics (revenue sharing indices) fairly represent the yearnings of Lagosians for posterity will assess our contributions to this life-enhancing project at a time when we are no more.
Earlier, the Permanent Secretary, Ministry of Finance, Mr. Hundogan Sewanu Temitope said the essence of the workshop is to receive guidance from RMAFC on the methodology and innovations to achieve the objectives of the workshop in particular and to enhance the revenue of the State in general.
The event was hosted by the Lagos State Government in conjunction with DYA Lorte Limited and was well attended by important personalities and stakeholders including the representative of the Federal Commissioner RMFAC, representing Lagos State, Mr. Isiaka M. Hamisu, Chairmen of Local Governments and Local Council Development Arrears, Body of Permanent Secretaries, Council Managers and Treasurers, Education Secretaries amongst others.
