Lagos State Governor, Babajide Sanwo-Olu, on Monday canvassed 42% share of the revenue in the Federation Account to states in order to correct the fiscal imbalances in the nation’s political structures.
The Governor made the submissionat the 2-Day South-West Zonal public hearing organized by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) to flag off the Review of Allocation Formula for the three tiers of government.
Sanwo-Olu maintained that increasing the allocations to states would enable them to improve their funding on development programmes at the grassroots, saying that the present sharing model which only gives states 26.72%, while the FG takes 52.68%, is seriously flawed and deserves to be immediately reviewed.
He said, “Nigerian fiscal federalism should be adjusted to develop more expenditure responsibilities with appropriate revenue allocation to lower levels of government.
“So that federal government will focus on matters of national concern like security and defense, among others.
“The Lagos State Government proposed revenue allocation formula: Federal government: 34 per cent, State government 42 per cent, local government councils: 23 per cent and Lagos State (Special Status, 1 per cent).
“The solution is to diversify and strengthen the fiscal base of the state government.
“The need to reverse the age-long fiscal dominance by the federal government in order to re-establish a true federal system is strongly recommended”, Sanwo-Olu advocated.
He further explained that the peculiar position of Lagos State in the country’s economic system also necessitated the need for the state to be granted the highest share of 42%, adding that local governments’ share should also be reviewed to 23% since both tiers of government are closer to the people.
According to him, the upward review of the local governments’ allocations will help in nurturing strong, transparent, efficient and independent fiscal institutions that will also help in nurturing strong transparent, efficient and independent fiscal institutions.
He expatiated: “This will further ensure accountability and proactively address emerging fiscal challenge in the public sector.
“It is the position of Lagos State Government that State Governments should share 42 per cent of revenue accruing to the Federation Account”, the governor added.
In addition, Sanwo-Olu also advocated the amendments of the provisions in the Concurrent Legislative List in the Constitution to give states more responsibilities of governance.
Specifically, he listed some of the responsibilities to be jointly handled by the Federal and State Governments as including ‘regulation of labour, mines and mineral, social security and statistical system (census, birth and death etc) and guidelines and basis for minimum education, business registration, price control, national parks, fishing and fisheries.”
Sanwo-Olu also recommended that the Derivation and Ecological Fund should be de-centralised such that each federation unit will have access to its own reserve whenever the needs arise.
He clarified: “In other words, the 1% allocated to the Federal Government in respect of the Derivation and Ecological Fund should be deducted from the Federal Government’s share of Derivation and Ecological Fund will now stand at 1.72%.
“The proportion allocated to Stabilization Fund should be increased from 0.5 to 1%. This amount should be deducted from the percentage hitherto allocated to special fund on the development of natural resources”, the governor added.
With 34% of the revenue allocation now going to the Federal Government as he proposed, Sanwo-Olu said that the central government should now focus solely on defence, external affairs, international trade, currency and banking, exchange control and federal trunk roads as its primary constitutional responsibilities.
