As Obasanjo Gets New Formula...
LG Revenue Slashed to15.21%
Primary education transferred to states
From Cletus Akwaya in Abuja
A new revenue sharing formula for the three tiers of government in the country submitted yesterday to President Olusegun Obasanjo by the Revenue Mobilisation, Allocation and Fiscal Commis-sion (RMAFC) slashed revenue accruing to local governments, from 20.60 per cent to 15.21 per cent.
State House sources informed THISDAY that the Federal Government would be allocated 53 per cent, the 36 states of the Federation would get 31.10 per cent while 774 Local Government Areas would get 15.21 per cent if and when the new formula comes into force.
Chairman of the Commis-sion, Engr. Hamman Tukur, who led a delegation of 36 members of the Commission and top management staff made the presentation.
Obasanjo who received the formula from the Commission is by the provisions of the 1999 constitution required to forward it to the Senate for approval.
If approved, the new formula will replace the 12-year old formula, which has been in existence since the military era.
At the moment the revenue accruing to the Federation account is shared between the Federal, States and Local Governments on the basis of a Modified Grant from the Federal Ministry of Finance, which was issued in March. Under the subsisting arrangement, Federal Government gets 52. 68 per cent, the 36 states of the Federation get 26.72 per cent and LGAs 20.60 per cent.
Our sources explained that although Federal Government under the new formula was allocated 53 per cent, it would in real terms enjoy 47.19 per cent as the balance has been earmarked for some special funds.
These include Ecology 1.5 per cent; Mineral Resource Development, 1.75 per cent; Agricultural Development Fund, 1.75 per cent and National Reserve Fund 1.50 per cent.
In making the proposal, the source said the Commission took cognisance of the Supreme Court ruling, which makes it illegal for money to be appropriated to any other activity other than the three beneficiaries of the account-Federal, states and LGAs.
The source maintained that under the proposal, the Federal Government would be the custodian of the special funds and would only spend it after due consultation with all the stakeholders (the other two tiers of government).
In transferring primary education to the states, the Commission was said to have also acted in compliance with the Supreme Court ruling that primary education be made the responsibility of the state and Local Governments.
Item 2(a) of the Fourth Schedule of the 1999 Constitution states: "The functions of a local government council shall include participation of such council in the Government of a State as respects the following matters - (a) the provision and maintenance of primary, adult and vocational education."
The Commission, however, recommended that allocation meant for primary education be remitted directly to the LGAs through the Local Government State Joint Account in each state of the Federation.
Obasanjo who received the document in the State House said, "There can never be a perfect solution to the problem of revenue allocation in the country".
According to a statement by the Senior Special Assistant to the President (Media & Publicity), Mrs. Remi Oyo, Obasanjo commended the Commission for the courage it brought to bear on the difficult assignment. The President said, the report would be "clinically studied and necessary steps taken."
Obasanjo further expressed hope that in the future, consideration should be given to effort at innovative revenue generation activities in working out the revenue formula.
"Unless we reward innovation, enterprise, responsibility and some (form) of sanction for misbehaviour, our effort at dishing out money will remain just that," the President said.
The President described education as a common factor of development, unity and progress in Nigeria stressing that "the more disparity we have in education, the more divided we will be."
Chairman of the Commission, Tukur in a brief remark at the occasion said in spite of the challenging assignment, the Commission did its job "fairly, equitably and outside the narrow boundaries of parochial interest."
Tukur explained that in view of the Supreme Court judgment, the Commission had "placed squarely, the responsibility of primary education on the state Governments and has also defined the level of participation by the Local Governments in this area.
The ceremony yesterday also marked the end of the five-year tenure of the Commission members having been sworn in September 20, 1999.
Alongside the report on revenue formula, the President received another report from the Commission on diversification of the National Economy.
At the occasion, the President said the Federal Government placed great emphasis on agriculture, manufacturing, solid minerals and tourism.
He also emphasised the importance of the National Reserve Fund, which he said must be built up for the rainy day.
He urged all stakeholders to resist the temptation of spending the Fund under any current circumstance.
The formulation of a revenue allocation formula under the present political dispensation had become controversial after the Federal Government and states disagreed on the required figures which will do justice to all the three arms.
A formula sent to the Senate for approval was withdrawn prematurely by the Presidency which argued that there were different versions of the formula in circulation.
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