Revenue allocation formula in nigeria. My take on Nigeria’s new revenue allocation formula 2022-10-11
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In Nigeria, the revenue allocation formula is a process by which the country's national revenues are distributed among the various levels of government (federal, state, and local) and among the different sectors (such as education, health, and infrastructure). The formula is an important part of the country's fiscal federalism system, as it determines how much money each level of government and sector receives and how those funds are used.
The revenue allocation formula in Nigeria has undergone several changes over the years, with the most recent revision occurring in 2020. The current formula consists of three tiers: the first tier is the allocation of revenue to the federal government, the second tier is the allocation of revenue to the state governments, and the third tier is the allocation of revenue to the local governments.
At the federal level, the largest share of revenue goes towards defense, debt service, and the judiciary. Other sectors that receive a significant share of federal revenue include education, health, and infrastructure.
At the state level, the revenue allocation formula takes into account the population, land area, and internally generated revenue of each state. States with a larger population and land area, as well as those that generate more internal revenue, receive a larger share of the revenue. The revenue allocated to the states is used to fund various sectors, including education, health, and infrastructure.
At the local government level, the revenue allocation formula is based on the population and land area of each local government area. Local governments with a larger population and land area receive a larger share of the revenue. The revenue allocated to the local governments is used to fund various sectors, including education, health, and infrastructure.
The revenue allocation formula in Nigeria has been a source of controversy in the past, as different levels of government and sectors have argued for a larger share of the revenue. However, the current formula has generally been seen as fair and has helped to ensure that all levels of government and sectors receive the funding they need to provide essential services to the people of Nigeria.
Principles Of Revenue Allocation In Nigeria
IN PARTTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE B. This is coming 30 years after the last exercise was carried out in 1992. These principles include population size, land mass, derivation, ecological problems, etc. Revenue sharing is an issue that will continue to generate reactions from time to time from all the stakeholders in the Nigerian state. The commission also reportedly received memoranda from the public sectors, individuals and private institutions across the country. Hence, these states believe they are being cheated when the Northern states have more of what they seemingly work for.
Revenue Allocation in Nigeria: Definition and the Sharing Formula
The revenue allocation phenomenon in Nigeria is basically the issue of distribution of national resources revenue, mobilized by the Fiscal Federalism in Nigeria CHAPTER1 INTRODUCTION: The question of an acceptable formula for revenue sharing among the component tiers of the Nigerian nation is one of the most protracted and controversial debates in the political and macroeconomic management of the economy. On the basis of this derivation principle, the distribution of total non-declared revenues was found to be as follows: East 38%, North 36%, and West 26%. Shehu, PhD ABSTRACT This paper examines judicial review and judicial power in Nigeria under the 1999 Constitution in relation to the constitution itself and in relation to the political branches of government. This is because there is always a constant need to improve the method of sharing revenue so as to ensure even spread of national resources to all units. Do you require the service of a tested, trusted and experienced trader who can help you trade your online Forex, Bitcoin and Binary accounts for minimum 10-20% weekly profit?. First, both protectorates had fiscal years beginning at different times of the year.
Which state has the highest revenue allocation in Nigeria?
State Joint Local Government Account Allocation Committee The functions of this committee is to ensure that allocation made to the local government councils from both the Federation Account and the state internally generated revenue are promptly paid into the State Joint Local Government Account and distributed to the local government council in accordance with the provisions of the law. Examples include responsibilities like the police, public transport, etc. Basically, fiscal federalism is all about revenue generation and sharing amongst all levels of government for development of a nation. Find Premium Arithmetic mean Harshad number Mass Revenue Generation in Local Government Councils in Nigeria REVENUE GENERATION IN LOCAL GOVERNMENT COUNCILS IN NIGERIA. Three marbles are drawn one after the other without replacement. However, Nigeria has adopted a system many now refer to as fiscal centralism where revenue allocation and fiscal policies are left to the central government and not the fiscal federalism decentralised and devolved revenue allocation and fiscal policies it so claims to practice. Brief history about the principle of derivation in Nigeria The principle was first open to discussion in 1946 by the Phillipson commission who regarded it as a way of making regions with natural resources benefit from their God given endowment based on contribution to the central revenue pot Adebayo, 1988.
Revenue allocation refers to the practice whereby one level of government turns over a portion of the revenue it generates from taxation and other sources to another government level which is usually a lower level of government. Highlighting the key recommendations in the report, Mbam said the proposed vertical revenue allocation formula suggested 45. Inland Revenue Service Director of Research, National Universities Commission Treasurer,. Although, there is an increase compared to the immediate past 1% derivation. REVENUE ALLOCATION IN NIGERIA.
Agriculture, for instance, was a major source of revenue for the Western Region. The North and West felt irked that the East contributed the least to the central pool, but claimed the most from it. In spite of increased revenue generation in Nigeria, the country has not experienced the expected economic growth. The concept of fiscal federalism has attracted a bulk of attention in the discourse of Nigerian federalism. In Nigeria parlance, revenue allocation could be defined as the practice whereby the federal government shares and distribute some part of the generated revenue to States and the local governments. J Cookey, submitted its report to theBabangida government in 1987.
It recommended a new revenue allocation formula under which the Federal, State and Local governments would share the centrally-collected revenue in the ratio 40:40:20. These further divisions only complicated the revenue allocation even more. The snippet of the report published thus far is silent on this. The response of the president to the new revenue allocation formula is on point. This explains why during the debates on the Okigbo Committee recommendations in the National Assembly, for instance, legislators from the northern states argued vehemently that land mass should be used as a revenue allocation factor while their counterparts from the southern states especially the eastern states, insisted on the derivation principle.
There is just enough bottled milk to meet Premium Planned economy Economic system Market economy. No two of the regions ever agreed on which principles to be applied. Retention of the basic revenue sharing formula now in use. Anyway, the National Assembly can always amend the proposed revenue sharing formula to reflect that reality when the time comes. The Senate formula, which was therefore in use all through the Shagari era reserved 58. This decree altered the revenue allocation formula by toning down the all-powerful derivation principle and introducing measures of fiscal equalization among the states. When the military took over power in 1966, it set up an interim committee Dina committee that again recommended the derivation principle due to its relevance.
Government Revenue Allocation In Nigeria & Sharing Formula
This kind of situation is one of the prerogatives functions of the federal government. There is also the issue of how to share revenue among the states and local councils. This will only be possible when percentage derivation to mineral producing states become attractive. The census should provide reliable statistical details for problem-free revenue allocation in the coming years. The amalgamation immediately introduced a problem by transferring customs duties to the central government, thereby causing a lot of suffering to the southern provinces that relied almost completely on such duties for their revenue. However, the Political Bureau, appointed in 1986 and headed by Dr.
Tag: What Is Revenue Allocation In Nigeria. What is the sharing formula? The problems actually began in 1914 when the northern and southern protectorates of Nigeria were amalgamated. The main reason for this is the undue attention given to political considerations. Gs respectively FEDERAL GOVT. The Horizontal Allocation Formula: The formula is applicable to States and Local Governments only. The Horizontal Allocation Formula: The formula is applicable to States and Local Governments only. The Murtala formula reserved 75% of all centrally- controlled revenue for the Federal government, while the twelve states were to share 22%.