Review of Revenue Allocation Formula: A Win-Win-Balanced Federalism - Okechukwu

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By Iheanyi Chukwudi

Former Director General of Voice of Nigeria (VON), Mr Osita Okechukwu, has said that the proposed review of revenue allocation formula is a “Win-Win-Balanced Federalism."

Okechukwu who is a foundation member of the All Progressive Congress (APC), said the review was long overdue, expressing his total support for the proposed review of the existing Revenue Allocation Formula especially now that the Constitution is being altered.

Speaking to newsmen in Enugu shortly after the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Mohammed Shehu, announced plans to review the Revenue Allocation Formula, the

former VON boss canvassed for the reduction in the huge extant revenue allocation to Federal Government.

He said the FG allocation should be reduced from 52 per cent to 40 per cent, to guarantee ultimate balanced federalism.

Reviewing the Revenue Allocation Formula and reducing the FG allocation, Okechukwu said, would enhance the progress and prosperity of the citizenry, albeit ultimately advancing the frontiers of our grassroots democracy.

He said, “My observation over the last decades informed that the political banditry, ultra-nepotism and tension soaked presidential election in our dear fatherland is largely due to unbalanced federalism.

And unbalanced federalism is an outlier of do or die struggle of who presides over the huge Oil Revenue (a.k.a. national cake) at the over centralised Federal Government.

And I agree wholeheartedly with Shehu’s submission that the review of the vertical revenue-sharing formula, which determines how federally collected revenues are shared among the federal, state and local governments has been long overdue.”

According to Ikechukwu, the 33 years old revenue formula – "which is 52.68 per cent Federal Government; 26.72 per cent States; 20.60 per cent LGAs; and 4.8 per cent Special Funds," should be changed.

He further said, “One per cent FCT and Ecological Fund; 1.68 per cent Natural Resources and 0.5 per cent Stabilisation Fund, which are fractions that make up the rest – is antithetical to development and retrogressive.”

Okechukwu said as a matter of security and evolving socioeconomic, political and fiscal realities, he proposes revenue formula of - 40 per cent FG; 40 per cent States; 10 per cent LGAs and 10 per cent to the rest.

He suggested that the "LGAs’ allocation should be reduced since all genuine efforts made in the last 25 years to retrieve LGAs from the stranglehold of our emperor governors had repeatedly failed.

Even the financial autonomy initiative by President Bola Tinubu, which culminated in the July 11, 2024 Supreme Court landmark judgment had failed woefully; it has become pragmatic imperative to stop chasing shadows."

He stressed that revenue allocation review exercise in the past "had been controversial and marred by hate pandemic of ignorant political bandits masquerading as ethno-religious champions."

The former VON DG, urged "divisive elements to sheath their arsenal and acknowledge the gospel truth; that abject poverty, grinding hunger, gross unemployment, crisis of inequality and palpable insecurity are still unfortunately plaguing all geopolitical zones."

He therefore, called on "President Tinubu, the Governors, national and state legislators and patriots to breathe life into the Constitution with this Win-Win-Balanced Federalism move, especially now that we're altering it."