Revenue Formula: FG Proposes 3.13% Increase To LGAs

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As the debate for the review of revenue allocation amongst the three tiers of government gain traction, the federal government has proposed 3.13 percent revenue increase to the local government.

The federal government has agreed to shade-off 2.03 percent of its allocation in favour of the local governments.

By this proposal, the federal government will shade-off 2.03 percent of its allocation and the states will cede 1.1 percent all in favour of the local governments.

Our correspondents reports that there has been rising calls for more funding of local governments and full autonomy of LGAs as a subnational government.

The federal government’s position was disclosed by the Secretary to the Government of the Federation, Mr. Boss Mustapha, at a townhall meeting on the review of the Nigeria’s vertical revenue allocation formula held in Abuja on Tuesday.
The townhall was conveyed by Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC).

Although the federal government is willing to concede more money to the LGAs, it is also advocating that some of the items on the Exclusive List be taken off to ease some of its burden.

“As an interim and immediate measure, the Federal Government, is therefore, proposing the following: Federal Government 50.65%; State Government 25.62 %; Local Government 23.73% and Derivation Allocation 13 %” Mr. Boss Mustapha said.

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

The SGF noted that the “revenue allocation should be done constructively in the face of dwindling national revenue base and the imperative for states to generate their IGR. Equally important is the fact that this review should culminate in improved national development.”
– Daily Trust

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