Federal Allocation Formula: Let's Have a Chat

By

Egbuna Onyeagwa

AlOnyeagwa@aol.com

You ever heard the expression: 'Give a guy some fish today and he/she will come for more tomorrow. Teach the same guy how to fish and he will never come back.'

We can extend this anecdote to other commodities without limit. With this background shall we look at what is happening in Nigeria? There is no budget for 1999, 2000, and 2002. Why?  Congress wanted more than the country could afford. Whose fault is that? No one! Why bother about it? You know there is an underground economy. You don't have to pay attention to whatever the numbers say because they don't matter. Well this isn't just paperwork; peoples' lives are involved. People have to feed their families. Well, it is not my responsibility to feed any family. I am a government official. All I need do is wait for my paycheck at the end of the month. If I don't get my paycheck I'll move for the impeachment of the head of state. He is not doing the job.

And so this brings us to the revenue allocation formula. What exactly do we want to do? I don't live in Nigeria but I am a Nigerian. Naturally I have interest in what goes on in Nigeria because I have relatives who live there. As a Nation all nationalities are interested in Federal Government treasury- well it is the oil money and I need to get my share of it.

I like to see my country developed just like the US or Great Britain. This Nigeria Federal Government must do its job and develop the country. What's there for me? I am just an ordinary citizen. I need money to feed my family and I will get that money by whatever means possible including stealing. And so I like to ask why you need a Federal Allocation Formula. Why do you want to get involved in such a monster? You know you will never be able to satisfy everybody and so why spend your time on it? Instead of Federal Allocation Formula, how about creating Federal and State Tax revenue so the state can collect their own tax based on earnings in their state? What is this thing called state of derivation? You don't need that. Nigerians have shown they are incapable of defining the problem before offering a solution. So why is there no development? The answer is obvious and that is there are no incentives. What can Government do? The Federal Government can start by developing a system that rewards states for generating the initial development capital for major public construction project. In some circles this is called matching fund. In its simplest form the Government matches every Naira spent on a project. What can this do for governing? It will certainly help many states with their projects and put the responsibility for managing their state in their hand instead of the Federal government. The Federal Government and national Assembly should spend time examining the Tax System and Federal Allocation Formula. 

Egbuna