• Friday, March 29, 2024
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Obaseki seeks review of revenue allocation formula to reflect economic realities

Obaseki

The Edo State governor, Godwin Obaseki, has urged the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) to review the present revenue allocation formula to reflect the present and changing economic realities amid fiscal challenges faced by states in the wake of the coronavirus (COVID-19) pandemic.

Obaseki gave the charge on Thursday when he received the Federal Commissioner of the Revenue Mobilisation Allocation and Fiscal Commission, Mohammed Kabir Usman, and other members of the team on a courtesy visit at the Government House, Benin City.

Obaseki said even as a state, Edo finds itself under pressure “as almost all federal agencies operating in the state rely on our support”.

SEE ALSO: https://businessday.ng/business-economy/article/governor-ishaku-seeks-to-enhance-revenue-allocation-for-taraba/

“It looks like it is only the salary of its staff that the Federal Government pays, while other operational logistics and expenses are shouldered by the state and the revenue allocation formula remains the same,” the governor said.

“I am happy you are in Edo and on your own, appreciate and understand the need to introduce more transparent ways of gathering data and information, which is the basis for determining the indicators for this allocation,” he said.

Obaseki said things cannot continue the way they are, especially due to some responsibilities borne by the state government.

“When local governments are in trouble, the states have to intervene. In Edo State, there are two local governments that we have to continue to give bailout,” Obaseki said.

He said his government believes in running an open government and urged RMAFC to review the indicators, focusing on achieving objective data that will help the body make positive decisions as it affects revenue allocation for local governments and states.

“Shortly, you will join us as we put pressure to ensure that the basis of revenue allocation, whether vertical or horizontal allocation, is reviewed. It is almost two decades since it was done and things have changed radically,” the governor said.

“With the readjustment of the economy as a result of COVID-19, we are facing major difficulties as internal revenue has come down, particularly the local government. We had started to reform their revenue base and were doing well until COVID-19 surfaced in March this year. This is important for us,” he said.

On his part, Usman thanked the governor for receiving his team, saying they were in the state, a team of 12 people, on a sensitisation and advocacy tour, the first of its kind.

“The Constitution empowers the Commission to determine the revenue sharing formula among the various stakeholders, that is, Federal, State and Local Government, from time to time. It also has the power to determine the salaries and allowances of all political, judicial and public officers of the federation,” Usman said.