RMAFC to Review Indices for Allocations of Revenue and Derivation Principle

The Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Engr. Elias Mbam has said that the agency would soon start the process of reviewing indices for revenue allocation and derivation principle. He made the disclosure at a retreat for the federal commissioners of the agency appointed recently by the federal government.

The Chairman said that the commission would carry out a critique of existing processes for reviewing indices of sharing of the 13 per cent derivation fund to avoid the recurrent problem of over payment and under payment for some states.

According to him, the commission would also closely consider addressing the issues of compensation for states currently suffering from the adverse effects of oil production activities and security beyond 200 meters isobaths.

Engr. Mbam said that the retreat was packaged to enable the newly appointed members of the commission to carefully examine and understand the operations and fundamental responsibilities of the commission having regard to the constitutional functions of the commission which are very sensitive and challenging. With the retreat, he said the commission would be able to set its agenda and chart a new course for the achievements of its targets.

He expressed concern over the poor level of revenue accruals in the Federation Account, assuring that steps were being taken to ensure that all revenues generated from either oil, gas, Federal Inland Revenue Services (FIRS), or Nigeria Customs Service (NCS) and Department of Petroleum Resources (DPR) were properly accounted for.

According to him, apart from plugging all possible leakages in the revenue system, the commission under his leadership would ensure that all the revenues are not only collected, but adequately accounted for from the point of collection to the distribution to the three tiers of government.

Also speaking at the occasion Governor Godswill Akpabio of Akwa Ibom state stated that continuous calls for more funds allocation from the states would persist given the need to promote development from the grassroots to the centre, instead of the present situation of the federal government taking on too much funds for very little work being done.

Akpabio added that instead of the federal government deploying a larger proportion of funds received from the federation account to consultancy services and other sundry expenses that do not impact positively on the people, it should have the courage to let the states have more for developmental purposes.

He stated that the federal government must have the courage to agree that development can only move from the states to the centre and not the other way round.

The governor therefore urged the commission to urgently address the contentious issue of revenue allocation formula and come up with a new formula that would ensure equity, justice and fairness to all stakeholders. He also said the commission should carry out a critique of existing processes for reviewing indices of sharing of the 13 per cent derivation fund to avoid the recurrent problem of over payment and under payment for some states.

Representing the Vice President Namadi Sambo to declare the retreat open, the Finance Minister Dr Olusegun Aganga, finance urged all stakeholders in the sharing of federation account to cooperate with the commission towards providing equitable revenue formula, adding that federal government was aware of the enormous responsibilities of the commission and would not renege in its pledge to provide the necessary environment for it to deliver on its mandate.

He expressed the desire of the federal government to reduce the high cost of governance, adding that government has already taken steps in the 2011 budget to address the issue and challenged the RMAFC to come up with a solution to the problem.

The Chairman of public affairs and communications committee of the commission, Alhaji Zubairu Dada, said that the agency has realised the huge losses by government through malpractices in some collecting agencies and was determined to promote a new regime of accountability and transparency in the collection and management of the country’s revenues.

He further disclosed that the commission is working on building capacity of its officers to enable them respond appropriately to such lapses. He spoke on the significance of synergy and cooperation among the various stakeholders through harmonisation of ideas and activities, stressing the need for proper assessment of the respective account records as well as close monitoring of funds accruals and remittances by the various revenue generating and collecting agencies domiciled with the Central Bank of Nigeria (CBN) to ensure that they were up to date.

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