Revenue Allocation Formulae - 1815 Words

Revenue allocation formulae: The current revenue allocation formulae is 52.68%, 26.72% and 20.60%.for the F.G, States and L.Gs respectively | FEDERAL GOVT. | STATE GOVT. | LOCAL GOVT. | | | | | |52.68% |26.72% |20.60%. | THE CRITICS The current revenue allocation, as defined in Section 162 (2) of the Constitution of the Federal Republic of Nigeria, 1999, discriminates against the†¦show more content†¦For D/X = 0 (no derivation fund), and D/X = 1 (all available funds are by derivation), then the overall percentages are: Ratios: D/X = 0 50:25:25 36:28:36 D/X = 1 43.5:28.25:28:25 31.32:37.36:31.32 Swing: 6.5 – 3.25 – 3.25 4.68 – 9.36 – 4.68 It is as simple as that, and would be a good political compromise, and will not lead to too much shock in the system as D/X moves up or down, in which case Choice (i) is better than (ii) and (iii) are better. The claim here is that the recent full pronouncement of Nigeria’s Supreme Court on littoral states’ (non) resource control DEMANDS that our country Nigeria NOW simplify its revenue allocation formula in order to establish accountability and transparency, and yet satisfy the Constitution. Thus I am recommending we do indeed â€Å"Keep It Simple†¦.!† My preferred recommendation here? After dividing 13% of the derivation fund equally among state and local governments, let Federal Government have 40% and the State + Local have 60% of the remainder. Then, in a spirit of true federalism and devolution of power, let the Constitution merely specify that no tier get lower than 20% . Each state then determines its own ratio between State and Local Government (to add up to 60%) basedShow MoreRelatedRevenue Allocation Formula in Nigeria2406 Words   |  10 PagesREVENUE ALLOCATION FORMULA IN NIGERIA INTRODUCTION Prior to the discovery of oil in Nigeria, other sectors of the economy thrived. 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