Revenue Sharing: FG Proposes 3.13% Increase In LG Allocation

The federal government disclosed that it has proposed a 3.13 percent increase in revenue allocation to local governments.

Boss Mustapha, secretary to the government of the Federation, who was represented by the Permanent Secretary, Political and Economic Affairs, Andrew Adejoh, disclosed this at the town hall on a new revenue formula organised by the Revenue Mobilisation Allocation and Fiscal Commission in Abuja on Tuesday.

Mustapha explained that the proposal is in line with the current vertical revenue allocation formula, the Federal Government gets 52.68 per cent, state governments get 26.72 per cent, local governments get 20.30 per cent, while  13 per cent goes for the derivation formula.

It was proposed that FG should get 50.65 per cent; state governments, 25.62 per cent; while the local governments should get 23.73 per cent.

According to the SGF, the new formula will be in line with the levels of responsibilities assigned to each tier of government, according to the 1999 Constitution.

He said: “All over the world, revenue and resource allocation have always been a function of the level of responsibilities attached to the different components or tiers of government. It is therefore important that this Current exercise rests squarely on the 1999 Constitution (as Amended).

“It is, thus, very clear that for us to have an endearing vertical review of the present revenue allocation formula, we must first agree on the responsibilities to be carried out by all the tiers of Government.

“The present vertical Revenue Allocation Formula is: Federal Government 52.68 per cent; State Governments 26.72 per cent; Local Governments 20.60 per cent and Derivation Formula 13 per cent.”

Mustapha explained further that the federal government wanted to increase the visibility of sub-national level responsibilities in addressing health and insecurity issues.