How Population Affects Revenue Allocation Formula – Hamman Tukur Chairman RMAFC

The Revenue Mobilisation Allocation and Fiscal Commission is a constitutional body saddled with the responsibilities, amongst other things, of proposing a revenue allocation formula for the nation. The chairman of the Commission is Engr. Hamman A. Tukur who is presently in his second tenure at the revenue agency. In this interview, the Chairman answers questions on the implications of the just-released census figure on revenue sharing. He also talks on the position of the new proposed Revenue Formula before the National Assembly. Excerpts:
QUESTION:  Sir, how do you adjust the Revenue Formula?
Hamman Tukur: The Revenue formula which is used to distribute the funds among the three tiers of government is usually adjusted to reflect current issues, current data, like improvement in school enrolment, hospitals, road network or boundary adjustments between states. Periodically we examine and look at fresh indices and then adjust the formula to distribute the funds.
QUESTION:  What about the implications of the recently released census figure?
Hamman Tukur: On the recent development we have to look at the new population figures once they become official as confirmed by the National Population Commission and when it is gazetted to confirm its authenticity. We may not rely heavily on the gazette itself as we still have to write to National Population Commission to confirm that the population figures are the official figures. We are sure by then the NPC would have considered all the protests and the complaints and probably expect the report of the population tribunal before its confirmation as official document. Once they are accepted officially, the Commission must reflect the new population on the current formula being used as well as look at the proposed formula and also make necessary adjustments accordingly in order that it will affect whatsoever is being disbursed as well as what is being proposed for the new era.
QUESTION:  Assuming the population figure is approved by the National Assembly and gazetted while the new revenue formula Bill is still also before the National Assembly; does it mean you will withdraw the Bill before the NASS?
Hamman Tukur: No! You see the Revenue Formula has little to do with the population figures. As I said the current practice in distributing the revenue from the federation Account to the beneficiaries will have to be revised to reflect changes in the population. We are not going to withdraw the proposed new revenue formula from NASS. We will just write to the President telling him “Pages XYZ in the proposal should be changed to reflect the current issues.” We don’t know if constitutionally approval from the National Assembly finally validates the national population figure. We are not sure. But whether they have to approve it or not is still not the business of the Revenue Commission. What is official and of concern to our Commission is the outcome of the population figures of Nigeria divided into states and local government councils so that we know how to compute and provide indices for the beneficiaries.
QUESTION:  Sir, there is this excitement by some states after the publication of the latest census figures that it would have significant impact in revenue being distributed to the states and local government. How true is this?
Hamman Tukur: (cuts in) No it is a yes and no. You see, you have only a given basket of money. Let’s say, for example, if there has been just about 200 billion naira to be distributed among the three tiers, it will still be the same quantity of money distributed. Whether the national population is 140 million or less, it will still be within the N200 billion that is available for distribution. The only change that may occur on the indices to any given state or local government is if its relative population has changed. Mark my words, if its relativity to its colleagues has changed and not particularly on the figure itself. If it is worse it will receive less money on the basis of population than that of its colleagues. Let me give a simple example where a particular State in its population ranking was, say number 34, within the population figures in terms of quantity of the people and in the new census moves to number 22, then it will receive more money. But if it retains its position it may not make much impact from allocation to be disbursed. In fact in some instances, you may retain your ranking in population figure and still have relatively less. It is the scientific computation that matters. It is the relativity which will improve what you get and not the net figures. It is relativity which is important not the quantum of the number of people in the new dispensation.
QUESTION:  Mr. Chairman does it give you cause for concern that after almost 8years in this democratic dispensation we are yet to have an acceptable revenue formula in place?
Hamman Tukur: I really want to put the cards on the table here. I think truthfully speaking, it seems one of the tiers of government is not keen to pursue the proposed revenue formula further because it may receive less than what it is receiving now from the ad-hoc arrangement after the Supreme Court verdict on Resources Control. It is true that, constitutionally any approved proposed revenue formula should not be more than five years. We have made some proposals; the last we submitted is about two or three years now in the National Assembly.
QUESTION: What does the Constitution say about the Revenue Formula?
Hamman Tukur: The constitution provision says “on receipt of advice, the President shall table the proposals to the NASS.” The constitution uses the word “shall.” Now as the Revenue Commission we didn’t expect the Federal Government to send a Bill as the opinion of the first tier of government. The Federal Government should just attach its view to the proposal from Revenue Commission. It should send the advice with its own views about it. The states as beneficiary second tier are also free to send their own opinion about the package so also the 774 local governments in a typical democratic dispensation. This does not seem to have happened and the argument is a little bit confusing. At the National Assembly the House of Representatives on their part have received that advice and they have gone round the country to discuss with various interest groups. We are still expecting further positive development from the Senate with the hope that at last the Revenue Formula will be passed before the end of this administration.
QUESTION: Are you not disturbed or worried that in the 7 years of the existence of your Commission you are unable to provide an acceptable revenue sharing formula for the nation?

Hamman Tukur: Well, the final power, you see, is not for the Commission or any tier of government to impose a revenue formula on the country. It is the National Assembly that has the finally constitutional power to pass it into law. As I said the House of Representatives has already done the consultations but you might have to go and find out what is really happening on the new Revenue formula for the nation. We must also be mindful of political and legal technicalities involved in the exercise which the Commission has addressed in its submissions.

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