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FG Takes 50.65%, Retains 13% Derivation In New Revenue Sharing Formula

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The Federal Government has proposed an adjustment to the nation’s revenue sharing formula, allocating 23.73 percent to local governments as against the previous 20:60 percent.
Other adjustments include Federal Government, 50.65 percent as against 52.68 percent; state governments 25.62 percent as against 26.72 percent; while it retained 13 per cent derivative for the oil-producing states.
The Secretary to the Government of the Federation (SGF), Boss Mustapha, who made the Federal Government’s position known to Nigerians during a public hearing in Abuja, said that the government considered a number of things before arriving at its conclusion.
According to Mustapha, the Federal Government considered its increasing visibility in sub-national responsibilities due to weaknesses at the level, citing primary health care, basic primary education, increasing level of insecurity and increased remittances to state and local governments through Value Added Tax (VAT) sharing formula, where the Federal Government has only 15 percent and the states and local governments share 50 percent and 35 percent, respectively.
Mustapha, who was represented by the Permanent Secretary, Political and Economic Affairs, Mr. Andrew Adejoh, said that the current administration would implement whatever formula was passed by the National Assembly.
He said, “On behalf of the President, Muhammadu Buhari, I wish to re-assure all Nigerians that the Federal Government will implement the final outcome of the conclusion of this exercise as soon as the National Assembly enacts the relevant legislation to complete the process.”
The SGF said, however, that the responsibilities shouldered by each tier of government should guide the Revenue Mobilisation Allocation and Fiscal Commission in the new formula.
Mustapha said that a lot of the resources allocated to the Federal Government were spent on providing services that were the responsibilities of state governments.
According to him, “We are all agreed, as Nigerians, that the present Revenue Allocation formula, both vertical and horizontal, is long over-due for a review not only because the last one was done in 1992 but most importantly, contemporary issues since then, such as heightened insecurity, decaying infrastructure, need for appropriately matching statutory functions and tax powers, need to be taken into consideration.
“The Federal Government has keenly followed all the geo-political consultative process and it is important that we remind ourselves that review of revenue cannot and should not be an emotional or sentimental discussion and it cannot be done arbitrarily.
“All over the world, revenue and resource allocation has always being a function of the level of responsibilities attached to the different components or tiers of government. It is therefore important that this current exercise rests squarely on the 1999 Constitution (as Amended).
“The Second Schedule of the Nigerian constitution contains 68 Items on the Exclusive Legislative List, and these are areas in which the Federal Government is supposed to use resources accruing to the federation to provide services and related development needs. On the other hand, the 30 items on the Concurrent requires both the Federal and State Government to address.
“It is, thus, very clear that for us to have an endearing vertical review of the present revenue allocation formula, we must first agree on the responsibilities to be carried out by all the tiers of Government.
“In order to appreciate the position of the Federal Government, it is also necessary I share with us the vertical disbursement of the Federal Government’s share of 52.68%, which is as follows: Disbursement of the FGN Share of 52.68%; Consolidated Revenue Fund (CRF)48.50%; Federal Capital Territory (like a state)1.00%; Natural Resources Development Fund (states are the beneficiaries)1.68%; Ecological Funds 1.00% (45% to NEMA, NEDC, NALDA and NAGGW, 55% addressing ecological challenges at Sun-National levels); Stabilisation Account 0.50% (25 % – 0.125 to NSIA and 75% 0.375 managed by OAGF and mostly utilized for emergency requests by states).
“Similarly, within the Consolidated Revenue Fund, disbursements are made for Debt Servicing, Statutory Transfers, Salaries, Pension and Gratuities, capital supplementation amongst others.
“It is, therefore, clear from the above that the Federal Government spends most of its resources on and for the state and local government levels. When you juxtapose this with the equally greater number or responsibilities on the Exclusive Legislative List, you would even want to make a case for greater allocation to the Federal Government.
“However, the Federal Government has taken cognizance of the growing clamour for a review of the present vertical revenue allocation formula, President Muhammadu Buhari’s commitment to ensuring resources for development get to the poorest of the poor in our rural communities, imperative to incorporate local communities in our security architecture as well enhancing equitable and inclusive national development.
“Alongside the above, other considerations that informed the Federation Government’s position on the review of the present vertical revenue allocation formula included Federal Government’s increasing visibility in Sub-national level responsibilities due to weaknesses at that level e.g Primary health care, basic primary education; Increasing level of insecurity and increased remittances to State and Local Governments through the Value Added Tax sharing formula, where the Federal Government has only 15 % and the States and Local Government share 50% and 35% respectively.
“As an interim and immediate measure, the Federal Government, is therefore, proposing the following: Federal Government 50.65%; State Government 25.62 %; Local Government 23.73% and Derivation Allocation 13 %.
“It is important to restate that revenue allocation should be done constructively in the face of a dwindling national revenue base and the imperative for states to generate their IGR. Equally important is the fact that this review should culminate in improved national development.”
In his remarks, the Minister of the federal Capital Territory, Mr. Bello Mohammed, asked for more funding of the Federal Capital Territory, in view of its massive developmental needs.
He said, “Because of the massive expansion, for us to be able to develop the city to match the population expansion, we need to have a special funding status and that is our appeal to the commission and I am sure by the grace of God they will work towards it.”
Earlier, the Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engr. Elias Mbam, had said that the review of the revenue allocation formula became necessary because the last review was in 1992.
He added that there have been obvious changes in the nation’s socio-cultural, political and economic environments since that time.
“As you are aware, the 1999 Constitution of the Federal Republic of Nigeria (as amended) empowers the commission to periodically review the revenue sharing formula and principles in operation to reflect changing realities,” he said.

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Biden Pledges Support To Tinubu On Economy, Security

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President Joe Biden of the United States, has vowed to support President Bola Tinubu on economic growth and advanced security, among other critical aspects of his government.
Biden made this vow in a statement, while felicitating with Tinubu on Monday.
Recall that Tinubu and the Vice President, Kashim Shettima were sworn in respctively by the Chief Justice of Nigeria, Kayode Ariwoola.
The US President reiterated his administration’s readiness to work with Tinubu “to strengthen ties between the United States and Nigeria.”
Biden said, “On behalf of the people of the United States, I send warm wishes to the government and people of Nigeria as they inaugurate a new President. I look forward to continuing this work with President Tinubu to support economic growth, advance security, and promote respect for human rights.”
He expressed optimism about the ideas and energy of the dynamic connection between the two countries, noting that the US will continue to work closely with the most populous country in Africa.
Biden said, “As Africa’s largest democracy and economy, Nigeria’s success is the world’s success. Elected leaders owe it to their people to show that democracy can deliver for their needs.
“And the United States will continue to work closely with Nigeria, as a friend and partner, to deliver a more peaceful and prosperous future for our world,” he added.

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I’ll Study Wike’s Principles Of Governance To Succeed …As Obio/Akpor Welcomes Ex-Gov Back Home -Fubara

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Rivers State Governor, Sir Siminialayi Fubara, says he will continue to seek guidance from his predecessor, Chief Nyesom Wike, to enable him perform excellently in office.
The governor noted the enormous responsibility associated with governance and the success record of Wike that he has inherited, which serves as great motivation for his administration.
Fubara spoke at the grand reception organised by the chiefs, leaders and stakeholders of Obio-Akpor Local Government Area for Wike at Captain Elechi Amadi Polytechnic in Rumuola, Port Harcourt, yesterday.
The grand reception was a warm welcome back home staged by Obio-Akpor people for their son for representing the Ikwerre ethnic nationality and the State well, while he served as governor of Rivers State.
Fubara said the available evidence of performance of the former governor tells of the giant strides of a man who has gallantly ended another phase of public service.
He asserted that Wike conceived a vision of leadership, and followed it through conclusively without compromising it.
“It’s not how the story starts, it is how it ended. Available evidence around us is showing clearly that the story of my principal (Wike) has not ended, but he’s ended this phase well.
“It ended because he had a vision. It ended well because that vision was not compromised, he followed it to the end.
“So, I was to join the people of Obio/Akpor to congratulate you and to say you are a worthy son, that is why your people have to receive you and welcome you home”, he said.
Fubara stated that he is an unapologetic benefactor of Wike who is determined to continue to study Wike’s administrative prowess, political calculations, decision, and exploits in order not to disappoint Rivers people.
“As one of your benefactor, I will continue to study you. I have not learnt all that I need to learn. I still need to learn more because this business (of governance) is not an easy business. It’s a business that, life can be very white in the morning, and in the afternoon its grey.
“So, I still need that guidance from you. I will still come to you whenever I have any problem for your advice.
“Please keep your house and your door wide open for us, because we want to succeed like you succeeded”, the governor stated.
In his speech, Wike thanked the people of Obio/Akpor Local Government Area for the honour done him and for not abandoning him in his political career.
The former governor who was conferred with the title of Okwurume 1 of Obio/Akpor, expressed delight over the rousing welcome that emboldened his feeling of nativity as being of Ikwerre stock and an Obio/ Akpor Local Government Area.
He thanked his kinsmen for also bestowing chieftaincy on his wife, Justice Suzette Nyesom Wike, recalling incidences of betrayal by some of his political associates in Port Harcourt and Ikwerre Local Government Areas during the 2023 general election.
He, however, commended the people of Obio-Akpor for their steadfastness.
The former governor assured that now they have a new governor as their leader, he and members of the Peoples Democratic party (PDP) would definitely support him to succeed and also respect his leadership.
Chairman of the occasion, Senator John Azuta Mbata, said the people organised the reception for an illustrious son who created so much national impact, flying the Ikwerre nationality flag and making them proud.

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NLC, IPMAN, TUC, Others Kick As Tinubu Removes Fuel Subsidy

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The Nigeria Labour Congress (NLC), Trade Union Congress of Nigeria (TUC) and Independent Petroleum Marketers Association of Nigeria (IPMAN) have opposed the plan by President Bola Tinubu to enforce his predecessor’s decision to remove fuel subsidy by June ending.
Tinubu had earlier on Monday, while making his inaugural speech, affirmed that his administration would not continue to pay subsidy on petroleum products.
He said given the high opportunity cost the Federal Government was suffering to fund subsidies, it was no longer justifiable to continue with it.
“The fuel subsidy is gone!” Tinubu exclaimed during his inaugural address at Eagle Square, Abuja, shortly after he was sworn-in as the 16th President of Nigeria.
He said, “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor.”
Tinubu said since there was no provision for subsidy in the budget from June 2023, it stands removed.
On his economic agenda for the next four years, Tinubu said his administration would target a minimum annual GDP growth of six per cent.
“To do this, the new government will enact budgetary and tax reforms that will boost the economy and address multiple taxation that stymies foreign direct investment.
“On the economy, we target a higher GDP growth and to significantly reduce unemployment. We intend to accomplish this by taking the following steps: First, budgetary reform stimulating the economy without engendering inflation will be instituted.
“Second, industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
“Third, electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double and transmission and distribution networks improved. We will encourage states to develop local sources as well”, he said.
To foreign and local investors, the President said, “Our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home.”
However, NLC has expressed displeasure over the removal of the fuel subsidy without consulting relevant stakeholders and putting in place adequate measures to cushion its effect on workers.
NLC, in a statement by its President, Comrade Joe Ajaero, yesterday, noted with regret that a few hours after the pronouncement, some marketers shut down their filling stations while many were selling the petroleum products at high prices.
Describing the government’s action as insensitive, the NLC President said it has brought tears and sorrow to millions of Nigerians instead of the renewed hope the administration has promised.
He also said that President Tinubu’s pronouncement has devalued the quality of the lives of Nigerians by over 300 per cent and counting.
The statement read in part: “We at the Nigeria Labour Congress are outraged by the pronouncement of President Bola Tinubu removing fuel subsidy without due consultations with critical stakeholders or without putting in place palliative measures to cushion the harsh effects of the subsidy removal.
“Within hours of his pronouncement, the nation went into a tailspin due to a combination of service shutdowns and product price hikes, in some places representing over 300 per cent price adjustment.
“By his insensitive decision, President Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope. He equally devalued the quality of their lives by over 300 per cent and counting.
“It is no heroism to commit against the people this level of cruelty at any time, let alone on an inauguration day. If he is expecting a medal for taking this decision, he would certainly be disappointed to receive curses for the people of Nigeria consider this decision not only a slight but a big betrayal.
“On our part, we are staunchly opposed to this decision and are demanding an immediate withdrawal of this policy.”
NLC argued that the pronouncement has ripple effects on the economic well-being of the people
He said, “The implications of this decision are grave for our security and well-being.
“We wonder if President Tinubu gave a thought to why his predecessors in office refused to implement this highly injurious policy decision.
“We also wonder if he also forgot the words he penned down on January 8, 2012, but issued on January 11, 2012”.
NLC, therefore, advised Tinubu “to respect his owe postulations and economic theories instead of daring the people. It could be a costly gamble.”
Also, TUC, in a statement by its President and Secretary General, Festus Osifo and Nuhu Toro, respectively, rejected the removal of fuel subsidy as announced by Tinubu.
It warned that it is a joke taken too far.
The body, while assessing the President’s inaugural speech, said “TUC is delighted by the peaceful transition from the Muhammad Buhari government to the Bola Tinubu administration and across the 28 states of the federation. We congratulate Nigerians and the new administration at all levels even as we urge all those contesting the election results across the board to keep following the rule of law as provided in the constitutional and electoral act in seeking redress.
“While listening to Tinubus’s Inaugural Address, we were at first encouraged by his pledge to lead as a servant of the people (and not as a ruler) and to always consult and dialogue, especially on key and knotty national issues. But we were subsequently taken aback, even horrified, when he announced the withdrawal of subsidy on petroleum products.
“If by this, he means increases in pump price and the exploitation of the people by unregulated and exploitative deregulated prices, then it’s a joke taken too far. It is not for nothing the Buhari government pushed this to the new administration. But we expect the Tinubu government to be wise on such a sensitive issue and be more explicit in its pronouncement to avoid contradictory interpretations when comparing his written statement, what he said and the provision in the 2023 appropriation act.
“We dare say that this is a very delicate issue that touches on the lives, if not very survival, of particularly the working people. Hence, it ought to have been treated with utmost caution, and should have been preceded by robust dialogue and consultation with the representatives of the working people, including professionals, market people, students and the poor masses.
“Accordingly, we hereby demand that President Tinubu should tarry awhile to give room for robust dialogue and consultation and stakeholders engagement”.
Also, IPMAN said it was opposed to the President’s resident’s subsidy removal plan.
IPMAN’s National Public Relations Officer, Chief Ukadike Chinedu, said the new government should dialogue with marketers before taking the decision to remove subsidy.
“We are not in support of the removal of fuel subsidy at this time. We have said it repeatedly that our refineries should be fixed before taking such decision that will cause galloping inflation and inflict more hardship on the masses.
“The government of President Tinubu should not adopt what is in the transition document handed over to it by the administration of former President Muhammadu Buhari. Someone (Buhari) who for eight years did not remove subsidy is advising a new government to remove it.
“That is not fair and should not be adopted. Rather, the new government should sit and discuss with marketers and other stakeholders on how to manage the fuel subsidy regime. We now have the Dangote Refinery, but all our refineries are still not working, so we don’t think removing subsidy is the right thing to do now,” Ukadike stated.
He said IPMAN was ready to work with the new government and would proffer measures to address the fuel subsidy regime, instead of effecting an outright halt in subsidy.
Meanwhile, barely a few hours after Tinubu’s announcement on subsidy, fuel queues resurfaced in Abuja, Lagos, Port Harcourt and some other states.
The announcement triggered a rush for petrol at fillings stations in Port Harcourt as they struggled to get their tanks filled, over fear that once subsidy ends, the cost of PMS could rise above N500/litre.
Oil marketers had projected that the cost of the commodity could hit N700/litre, once the Federal Government ends subsidy on petrol in June this year.

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