Lagos State says it will continue to push for a special status for the State in the sharing formula of revenue allocation by the Federal Government.
The government insists that the time for a review of the subsisting revenue sharing formula was long overdue.
Speaking at a pre-southwest meeting with stakeholders held in Lagos, which included representatives of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), members of the Lagos State Executive Council, Lawmakers, Local Government representative, all agreed for upward review of revenue allocation for Lagos State.
The Lagos State Commissioner for Finance, Dr. Rabiu Olowo, said the effort was a proactive move to gather data towards an upcoming Southwest regional stakeholders’ meeting on the review of the subsisting Revenue Allocation formula.
He argued that the revenue allocation formula inherited from the military was skewed largely towards the Federal Government which, according to him, is inconsistent with present realities.
Arguing that the last review dated back to 1992, he mentioned that the prevailing situations have outgrown the subsisting provisions with variables which call for a review of the allocation formula.
“At this point in the national life, it was important that contributions be made to raise submissions to justify why the review should be effected on articulating positions in asking for a fairer allocation formulas.
“The constitutional mandate to review the Revenue Allocation formula is vested in the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
“Unfortunately, since the establishment of RMAFC in 1989, the last time we had a successful review was in 1992 and several other attempts to review it within the last 29 years have proved abortive!
“The current revenue allocation formula is far from being realistic. For instance, the number of states have increased from 30 to 36 states, number of local government increased from 589 to 774 local governments and, in Lagos, 37 LCDAs have been created to bring government closer to the grass root. The Constitution prescribes a minimum limit of 5years to operate an agreed formula before further review.
“From the publication credited to the RMAFC, Stakeholders at all levels and sectors are expected to participate and express their views which are expected to be the representatives of the views, concerns and yearnings of their all constituents across the country,” he said.
Olowo reiterated that with the status of Lagos as the economic nerve centre of the Country, the demands for a special status to Lagos had been long overdue.
Review of revenue
A Federal Commissioner representing Lagos State at RMAFC, Dr. Adekunle Wright, said in view of the changing situation and demands, the Commission has been prompted to host stakeholders across the the Country towards reviewing the revenue formula.
According to him, the Commission was desirous to “within the shortest possible time” come up with a feasible review for workable formula that suits present realities.
Explaining the expectations from the stakeholders in respect of the proposed formula, the Director, Inland Revenue Service, of the RMAFC, said the Commission looks towards arriving at a fair, just and equitable revenue formula.
Permanent Secretary, Ministry of Finance, Mrs Ayoola Oyeyemi said since its introduction for over 32 years, stakeholders have never come under a forum for deliberation to review the revenue formula.
She mentioned that the biggest challenge was that there is an absence of explicit vertical sharing factors in the constitution, against the horizontal factors, which according to her, makes it problematic to come with fair, just and equitable formula.
She submitted that it was important for the State to bring up robust memoranda for onward submission towards the upcoming zonal public hearing.
The State’s Commissioner for Economic Planning and Budget, Mr. Sam Egube, mentioned that “Lagos is a significant national asset,” not just for Lagosians but for national development.
Egube said with such indices as Lagos’ extreme high population density; a home to economic drivers; holding about 70 per cent of sea and air movement in the Country, the State deserves a special status.
He further argued that the continental free trade agreement holds bearing to the status of Lagos for its effectiveness.
According to him, “if it is good for Lagos, it certainly will be good for Nigeria because the call for special status for Lagos supersedes native expression but the national character of the State.”
He argued that leaving the State with challenges without special attention would pose problems for the entire country, stressing that the State needed more funds for infrastructure, policing, among several other demands.