By Omoh Gabriel, Business Editor
Federal Government of Nigeria has projected that the nation will earn a total of N24.1637 trillion Nigeria between 2011 and 2014. In its revised 2011 to 2014 revenue and expenditure framework submitted to the National Assembly, the Federal Government envisaged that its share of the amount based on the current revenue sharing formula, which gives the Federal Government 48.5 per cent of revenue in the federation account, will amount to N11.719 trillion.
The 36 states, whose share of the federation account is 26.72 per cent, will receive, in the four-year period, a total of N6.125 trillion. According to the projection, the 774 local government councils in the country will in the period be entitled to N4.977trillion from the federation account.
This implies that those clamouring for a review of the revenue allocation formula may have to wait until 2015. It equally means that states and local governments will continue to struggle for survival and look more inwards to generate revenue.
Jonathan writes House of Reps
The revised medium term framework was sent to the National Assembly with a covering letter signed by President Goodluck Ebele Jonathan. In the forwarding letter, the President said: “I seize this opportunity to express my gratitude for the enduring productive partnership between the National Assembly and the Executive arms of government in discharging our shared responsibility for nation building and I note, with thanks, the patriotism, commitment and support that the honourable members of the House of Representatives have consistently demonstrated.
“Recent domestic development, key among which was the partial withdrawal of subsidy on petroleum products and the ripple effects on government revenue and expenditure items, have necessitated the revision of the 2012 to 2014 medium-term expenditure framework and the 2012 budget proposal which I presented to the National Assembly on December 13, 2011.
“In this respect, I hereby forward copies of the revised 2012 budget proposal. It is my hope that the Honourable House of Representatives will kindly consider and approve these revised proposals expeditiously.”
A year on year break down of the revenue flow expectation into the federation account showed that in 2011, a total of N5.942 trillion was realized. Out of this the federal government’s share from the federation account amounted to N2.882 trillion, while the 36 states of the federation got N1.587 trillion as their share of the federation account.
The 774 local government councils in the country got N1.224 trillion as the equivalent of the 20.6 per cent they are entitled to as share of the federation account. The sum of N248 billion was set aside as special fund being the mandatory 4.16 per cent prescribed by the constitution.
This fiscal year 2012, the federal authorities in their estimation said the sum of N5.274 trillion will flow into the federation account out of which the federal government appropriated the sum of N2.558 trillion as its legitimate share of the federation account while the 36 states’ share of the federation account will in 2012 amount to N1.409 trillion and local government N1.086trillion. The sum of N220 billion will however into the special fund account.
According to the federal government’s 2012 to 2014 revenue and expenditure framework before the National Assembly, in 2013 a total of N6.260 trillion is projected as total revenue inflow into the federation account. Of this amount, the federal government is expected to receive from the account the sum of N3.036 trillion during the cause of the year while states and local government will receive as their share of the account the sum of N1.672 trillion andN1.289 trillion respectively. The sum of N261 billion is has been projected as the amount that will accrue to the special fund account.
In the last year of the medium term budget circle, 2014, the government expects that the sum of N6.687 trillion will accrue to the federation account for sharing. By the current sharing formula the federal government expects its share from the federation account to be N3.243 trillion. States are projected to share in 2014, the sum of N1.786 trillion while local governments across the country will share the sum of N1.377 trillion in 2014.
Ever since the Supreme Court Ruling on Offshore/Onshore Dichotomy (a.k.a. Resource Control), of April 5, 2002, the nation has been scampering for what to do. The 2002 Budget was thrown into disarray after the judgment and President Obasanjo has had to withdraw from National Assembly consideration for a new Revenue Allocation Formula that had been prepared for him by the Revenue Allocation Committee.
Since the 1992 Revenue Allocation Formula, the nation is yet to have constitutionally backed sharing indices for the Federal (FG), States and Local Government Councils (LGCs). The politics of revenue allocation even in the present democratic dispensation has been so contentious that last week Northern Governors and Arewa consultative Forum asked for a review.