RMAFC Presents New Revenue Sharing Formula To Buhari December

The Revenue Mobilisation, Allocation and Fiscal Commission says it will be ready to present a new revenue sharing formula to President Muhammadu Buhari for onward transmission to the National Assembly by December.

It said the ongoing consultation and sensitisation across the country were aimed at avoiding past pitfalls that made past attempts to review the formula unsuccessful.

Confirming the readiness of the commission to present the new revenue formula, RMAFC chairman, Elias Mbam, in a telephone interview blamed logistics for the failure of the commission to fulfill similar promises in the past.

Revenue sharing formula which has remained a controversial subject in Nigeria even before independence in 1960 refers to the proportion of resources accruing to the federation that goes to each of the components of the nation.

It also defines the proportion of resources that must be retained in the territories where they are generated as well as what goes to the agencies of government that collect the revenues on behalf of the federation.

The current revenue formula was designed during the tenure of former president, Olusegun Obasanjo.

Under this formula, the Federal Government gets 52.68 per cent, the 36 states share 26.72 per cent while the 774 local government areas in the country share 20.60 per cent every month.

However, there have been calls and attempts to change this formula to ensure equitable distribution of the accrued revenue.

The current plan to review the formula would not be the first time the RMAFC had undertaken to tinker with the country’s revenue-sharing arrangement.

In 2013, the commission embarked on a nationwide consultation with the 36 states and met with notable figures with a plan to review the formula.

Investigation showed that the politics and the eventual consequence of the Federal Government losing its fat allocation of the federation account are responsible for the delay in completing the process for the implementation of the new revenue formula.

Former Chairman, Public Affairs and Communication Committee at RMAFC, Ambassador Zubairu Dada, had in a statement on December 19, 2013 said the draft new revenue formula was ready and would be forwarded to former president, Dr. Goodluck Jonathan, in accordance with the constitution.

It is the responsibility of the president to lay the new formula before the National Assembly for necessary legislation.

Dada said members of the commission unanimously adopted the draft report following a two-week retreat at Tinapa, Cross River State where all the submissions, relevant documents and inputs from stakeholders were analysed and considered.

The commissioners had converged from 23rd November to 7th December on Tinapa Business Resort and Hotel, Calabar, Cross River State Capital where they held a two-week retreat to brainstorm on the Revenue Allocation Formula Draft Report.

Investigation shows that Jonathan did not make any attempt to table the draft revenue formula before the National Assembly before his tenure elapsed on May 29, 2015.

When Buhari assumed office on May 29, 2015, there was hope that the draft document would receive a fresh breath of life given that many state governments especially in the states controlled by the All Progressive Congress had vigorously advocated for the adoption of a new formula to help the states meet their financial challenges.

While the debate on a new national minimum wage lasted in 2011, many state governors had hinged their capacity to comply with the new minimum wage on a reviewed revenue sharing formula that favoured the states.

However, after the APC won election at the federal level, many of the states that had kept the Federal Government on its toes for a new formula had kept quiet.

As Jonathan, Buhari also tactically declined to receive the new formula from RMAFC.

In July 2017, the Senate asked the commission to review the current revenue sharing formula, stating that the current formula did not reflect the current economic realities in the country and that it favoured the Federal Government as the states and the local governments were struggling to survive economically.

In November 2020, the House of Representatives during a budget defence session asked the commission to create a new revenue sharing formula that would put more resources at the disposal of state and local governments.

However, still in November last year, the government blocked the Commission’s proposal on revenue formula and salary review.

Despite the fact that previous attempts to review the current formula have failed, the commission has established a new committee to undertake a fresh review of the formula, with sensitisation efforts ongoing across the country.

On how the commission planned to overcome past challenges, Mbam told one of our correspondents that the commission had intensified consultation and sensitisation to ensure that more Nigerians were aware and involved in the review process.

He said, “What the commission is doing now is that we have intensified consultation and sensitisation. I had a meeting and briefing with the House of Representatives leadership, the Speaker, Deputy Speaker and all the leadership of the house.

“We also have programmed to do the same with the Senate. Even at the subnational level, we are making sure that we carry along all arms of government – the judiciary, the executive and the legislator.

“So, we are doing extensive consultation. We have gone around the local governments and states to sensitise them, and now we are doing a zonal public hearing.

“We want Nigerians to buy into it, to be part of it because at times, the lack of information may bring misunderstanding of an issue.

“So, we want them to be part of what we are doing. Make your input down so that we will carry everybody along and at the end, we will have something that is fair to everyone.”

According to the commission, the new committee should submit a new formula for vertical allocation to the president, Major General Muhammadu Buhari (retd.), by the end of the year.

Speaking on this, the RMAFC chairman said the commission still planned to stick with the deadline for submitting the new formula to the President.

Mbam said, “It is in our plan to stick with the deadline. However, nothing is cast on stone. We assume that all things will be equal.

“If something happens that is above our control, there is nothing we can do. But the programme we are running is to conclude by December 31. December is to conclude our own side.

“There are three stages of reviewing the formula. When we finish our own, we make the presentation to the president; the president will table it to the national assembly. What we are saying is that at the end of the year, ours should be ready for presentation to the president.”