ADVOCATES of a new revenue allocation formula are likely to win their battle, sources said last night.
Leading the battle are governors, who are facing pressure from workers demanding a new minimum wage – N18,000.
The governors formed a seven-man committee, led by Governors Forum Chairman and Rivers State Governor Rotimi Chibuike Amaechi, to tell the President that fuel subsidy should be removed and a new revenue formula, which will give the states more cash – in line with their responsibilities – should be worked out.
“The President accepted the proposals in principle,” a source close to the Presidential Villa Wednesday meeting said, adding that “he is weighing the options”.
Reminded of the effect of the removal of subsidy (petrol price will rise, just as diesel is sky rocketing), the source, who pleaded not to be named, said: “I think it will be structured in a way that it will cause little or no pains. They realise the potential danger. I think it’s part of the economic planning.”
Labour has advised the government against the removal of subsidy, saying it will deepen the hardship in the land and fatten the purses of big businesses.
In Lagos yesterday, Governor Babatunde Fashola said the state would pay more than N18,000, if its allocation from the Federal purse is raised to meet its numerous needs.
Ekiti State Governor Kayode Fayemi restated the need for the review of the revenue allocation formula to enable states have more money to attend to their developmental needs. He said workers deserve the N18,000, even though most states do not have the capacity to fullfil the obligation.
Fayemi, who spoke to reporters at the Murtala Muhammed Airport, Ikeja, Lagos, supported the advocacy for the removal of fuel subsidy, which he said should not be extended to kerosine, which is used by low income earners.
He said: “First of all, we are looking for all available opportunity to make things relatively easier for us to comply with the law.
“All of us agree that the national minimum wage is a law; it is an Act of parliament. We are not abusers of the rule of law because we are products of the rule of law. To that extent, we all believe that if this is the law, we would have to comply with it.
“However, we also know that the capacity of the states to meet that obligation is highly in doubt. And the Federal Government, as well as the state governments, which are federating units, must come together and find a mechanism for achieving this objective, because we don’t believe that N18,000 is too much to pay workers. But in order to fulfil that, we must first of all have the money to pay.
“So, it is not a question of we will not pay; the resources are not there. How do we then get the resources in order to achieve our objective. That is the fulcrum of the discussion with Mr. President. And it was in that contest that the whole question of subsidy came in.”
On the impact the removal of fuel subsidy will have on low income earners, Fayemi said: “Well, this is a serious discussion we all have to have as Nigerians. We need to come to some definite realisation as to the best mechanism for making life more abundant for our people.
“Subsidy, naturally is not a choice we all want to go for, but we also know that it is really not the poor people who are also benefiting from the subsidy. It is those who are relatively well of that are benefiting from the subsidy. And as a result of that, the bulk of the fuel actually gets smuggled out of the country because it is cheap.
“So, I think that is the mechanism that we must look at so that it can be graduated. Things that directly affect poor people should be left out of this subsidy question, kerosene for example. But things that really focus on people that are relatively well of, and that can help us improve public transport. For example, we don’t need everybody to drive to work, provided that there is an alternative that makes it easier for people to get to work without having to suffer too much of indignity in the process.”
Fayemi spoke of plans by Southwest states to forge economic integration.
He said: “For example, we in the Southwest are talking about a great western rail that will enable people not only to leave Ekiti at 7am and get to Lagos at 9am to work, but also return at 5pm and get to Ekiti at 7pm so that they can have their breakfast before leaving home and have their dinner when they get home.”
Lagos State Governor Babatunde Fashola, also yesterday, said the state could pay its work force more than N18, 000 minimum wage, if the Federal Government increases its monthly allocation.
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