States, LGs to earn more than FG in new revenue formula

cdeadc buhari receives new revenue sharing formula x
cdeadc buhari receives new revenue sharing formula x

From Juliana Taiwo-Obalonye, Abuja 

Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has proposed a 3.33 per cent reduction in the statutory allocation to the Federal Government, while it increased those of states and local government councils by 3.07 per cent and 0.44 per cent respectively.

The new adjustments to the revenue allocation formula due to the federating units are contained in a report presented, yesterday, to President Muhammadu Buhari at the Presidential Villa, Abuja, by RMAFC Chairman, Elias Mbam.

In the new RMAFC proposal, the Federal Government, which previously received 52.68 per cent of the allocation, would now get 45.17 per cent, while states would  take 29.79 per cent as against the previous 26.72 per cent. Councils will now be allocated  21.04 per cent as against their previous 20.60 per cent.

With regards to the Special Funds, RMAFC proposed an increase of 0.2 per cent for the Federal Capital Territory (FCT) and a decrease of 0.38 per cent for the development of natural resources.

A statement by the Special Adviser to the President on Media and Publicity, Femi Adesina, quoted Buhari as saying after receiving the report, he would await the outcome of the ongoing constitutional review process before presenting the report of the review of the vertical revenue allocation formula to the National Assembly as a Bill for enactment.

“Ordinarily, I would have gone ahead to table this report before the National Assembly as a Bill for enactment. However, since the review of the vertical revenue allocation formula is a function of the roles and responsibilities of the different tiers of government, I will await the final outcome of the constitutional review process, especially as some of the proposed amendments would have a bearing on the recommendations contained herein,” the president said.

The president said for the nation to have a lasting review of the present revenue allocation formula, there must first be an agreement on the responsibilities to be carried out by all the tiers of government.

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He listed some of the proposed amendments in the report to include, the establishment of local government as a tier of government and abrogation of the state/local government account; moving airports, fingerprints, identification and criminal records from the exclusive legislative list to the concurrent legislative list, empowering the RMAFC to enforce compliance with remittance of accruals into and disbursement of revenue from the Federation Account as well as streamlining the procedure for reviewing the revenue allocation formula.

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The president assured members of the commission that the Federal Government would immediately subject the report to its internal review and approval processes, while awaiting finalisation of the efforts by the National Assembly.

He said this strategy, rather than issuing an executive modification order, as was done in 1992, was more in line with entrenching our democratic tenets.

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He commended RMAFC for a job painstakingly done, pledging his unwavering commitment and support to them in carrying out their constitutional mandates.

The president also thanked Nigerians, especially states and local governments, for making their inputs through the broad stakeholder engagement processes that produced the report. 

“I am aware the present revenue allocation formula has not been reviewed since the last exercise carried out in 1992.

“Considering the changing dynamics of our political-economy, such as privatisation, deregulation, funding arrangement of primary education, primary health care and the growing clamour for decentralisation among others; it is necessary that we take another look at our revenue sharing formula, especially the vertical aspects that relate to the tiers of government. This becomes more compelling as we need to reduce our infrastructural deficit, make more resources available for tackling insecurity, confront climate change and its associated global warming and make life more meaningful for our rapid growing population,” he said.

President Buhari said, as an advocate of grassroots development, he has always remained committed to ensuring all tiers of government are treated fairly, equally and justly in the sharing of national resources. 

Secretary to the Government of the Federation, Boss Mustapha, said RMAFC followed due process in undertaking the exercise, and sought the opinion of the Federal Government before finalising the report.

Mbam said since the last review was conducted in 1992, about 29 years ago, the political structure of the country has changed with the creation of six additional states in 1996, which brought the number of states to 36.

Correspondingly, he said, the number of local governments also increased from 589 to 774.

He said the leading philosophy behind the proposed review was guided “by the need for distributive justice, equity and fairness as enshrined in relevant sections of the 1999 Constitution (as amended).”

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