C’ttee wants new sharing formula to favour states, LGs

The committee, whose report, delegates began consideration yesterday, also stated that the powers conferred on the federal government to keep custody of and determine the terms and manner of fund allocation from the Federation Account negate the principles of fiscal federalism.It recommended that the sharing formula for funds accruing to the Federation Account among the […]

The committee, whose report, delegates began consideration yesterday, also stated that the powers conferred on the federal government to keep custody of and determine the terms and manner of fund allocation from the Federation Account negate the principles of fiscal federalism.
It recommended that the sharing formula for funds accruing to the Federation Account among the three tiers of government should be: Federal government 42.5% instead of the present 52.68%; State Government 35% instead of the current 26.72%; and the Local Governments 22.5% to replace the current 20.60%.
The committee spotted what it called imbalance in favour of the federal government in the sharing formula and maintained that the imbalance has adversely affected the performance of the federating units, just as it called for a review.
It recommended that the powers of the federal government under Section 162(3) of the 1999 Constitution, as amended, to prescribe the terms and manner of sharing national revenue should be exercised through the Revenue Mobilization, Allocation and Fiscal Commission.
The committee said RMAFC shall at the same time consult the federal and state governments before presenting a draft Bill on the matter to the National Assembly for enactment into law.
Conference will continue debate today on the committee’s report and on conclusion, vote on its recommendations and amendments submitted by delegates.