Obi advocates 40-40-20 revenue allocation formula

Governor Peter Obi of Anambra State has advocated a 40-40-20 per cent
revenue allocation formula for the Federal, States and Local
Governments in the country.
Obi made the suggestion when some members of the Revenue Mobilisation, Allocation and Fiscal Commission visited him in Amawbia, near Awka on Saturday.
He said the allocation formula currently in use did not in any way
reflect the realities of the day.
He said: “The formula that is in use today was put in place during the military era.
“In a proper federating state, there are only two units, the federal
and state governments.
“The local government does not exist.
“In a federating unit anywhere in the world, the key driver of
programmes is the state, which is the sub-nation.
“The nation is there, symbolic for issues of defence, external
relations, and so on.
“The format should have been 40-40-20; 40 for federal, 40 for states
and 20 for local governments, with a clause that no state will receive
lower than a benchmark.”
According to him, “what we find here is a state receiving 10 per cent
of what another state receives as allocation”.
The governor commended the efforts of the commission to review the
allocation formula and called on them to also keep in mind the
peculiarities of the geo-political zones.
“We are already disadvantaged because other zones are six and here we
are five, considering that it was not done by the Constitution of
Nigeria,” Obi said.
The leader of the delegation and Federal Commissioner for Anambra
State, Nnamdi Ekweogwu, said they were in the state to commence
sensitisation of the public.
Ekweogwu said: “The sensitisation is to ginger our people so that
adequate contribution shall be made to fashion out an acceptable
revenue formula for the nation.”
Ekweogwu said the commission had commenced the process of reviewing
the current formula, which had been in use for about 20 years.
“Once the revenue formula is established and passed into law, it is
expected to be enforced for at least five years,” he said.
He said the present formula was over 20 years old and was put in place
in 1992 by the military administration and had not been reviewed since
then.
He said: “An attempt was made in 2003 to establish a new revenue
formula but it did not materialise.
“Since 1992, the number of states has increased to 36, local
governments have increased from 586 to 774 and there are other
challenging factors.
“So, we have commenced the review of the formula with a review of the
literature of the formula that we had in place from inception to date.
“We have also carried out study tours of countries that operate
similar governing systems like Nigeria.
“We have also advertised in the media, called for memoranda from
states and other stakeholders to help us in the review of this
formula.”