The Federal Government intends to review the current revenue sharing formula for the three tiers of government, Mr Elias Mbam, the chairman, Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has said.
Mbam told pressmen Tuesday, after receiving an Award of Excellence from the Nigeria Civil Service Union, in Abuja.
Currently, the federal government takes 52.68 percent; states, 26.72 percent, while the 774 local government councils get 20.60 per cent of distributable Federation Account earnings.
It was put in place by former President Olusegun Obasanjo, via an Executive Order in March 2003.
Pursuing a new sharing formula, the chairman said, had become imperative, in view of the various responsibilities of the two lower tiers of government.
The process of putting in place, a new revenue sharing formula has been in the works since 2013 but had been hindered by lack of political will by successive presidents.
The RMAFC boss said he would increase work towards the diversification of the nation’s revenue sources, with a view to increase the earning.
He said: “My agenda is to expand the sources of revenue for the federation. I will like to expand the cake that we are sharing so that people will get reasonable quantity.
“I intend to do this through diversification in areas outside oil and gas and that includes solid minerals, agriculture and manufacturing.
“So, we will encourage states and let them know what is available outside oil and gas, so they can develop this aspect of the economy to their own benefit.”
He expressed optimism that with increased revenue to the lower tiers of government and fiscal autonomy to the local councils, more Nigerians would feel the impact of the development efforts of government.
There had been agitations from states and local governments for increased share of the federation revenue to the lower tiers.
FG should shed 20% of its revenue share
Commenting on the development, Barrister Eze Onyekpere, Lead Director, Center for Social Justice, recommended a 20 percent reduction in the current share of the federal government.
He said in the spirit of true devolution of power, the federal government should shed more weight to the states and the local government as they now shoulder more responsibilities. I recommend a 20 percent reduction in the current share of the federal government’s revenue allocation.
