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FG suppressing states’ agitation for new revenue formula —Finance Commissioners

After an umpteenth attempt to evolve a new revenue allocation formula for the country, states are beginning to show frustration about alleged determination by the Federal Government to ensure that such document does not see light of day anytime soon.

However, some members of the National Assembly had hinted at a plan to amend the Constitution in such a way that Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) will no longer present its findings to the president for onward delivery to the legislature.

Chairman of Forum of Finance Commissioners, Mr John Inegbedion, told the Nigerian Tribune that the politics of a new revenue allocation formula was very intense and had lots of political undertone.

He alleged that the Federal Government obviously did not want a new formula because it did not want to lose anything from its present 52.68 per cent share of the federation account.

When challenged as to why states and local governments had been lackadaisical on the important issue, Inegbedion, who was also Edo State Commissioner for Finance, quipped: “obviously, states and local governments want a new formula because the current one is archaic, but you know that Federal Government has not been enthusiastic about it.”

He cited the current situation whereby revenue generating agencies, like the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and the Department of Petroleum Resources (DPR) now shared from federation account whereas they were part of the load being carried by the Federal Government, which entitled it to a larger chunk of national revenue.

Both DPR and FIRS receive four per cent of revenue they collect as cost of collection every month, while Customs takes seven per cent.

He disclosed that revenue formula was a thorny and contentious issue that was always discussed during meetings of Federation Account Allocation Committee (FAAC) meetings, but that nothing came out of such discussions.

Also Akwa Ibom State governor, Udom Emmanuel recently cried out saying review of revenue formula was long overdue.

Udom who was discussing with a delegation of RMAFC said “the review of revenue formula to reflect the structure of the country based on equity, fairness and justice is long overdue. The Federal Government should look into it.”

Nigeria’s revenue allocation formula was last comprehensively reviewed in 1992, but President Olusegun Obasanjo issued an Executive Order in May 2002.

“That modification order was amended in January 2004 and again in January 2004 as a result of a Supreme Court judgment.

Before then, however, RMAFC had submitted a contentious proposal to Obasanjo who then presented it to National Assembly.

In it, the Federal Government was to have 46.63 per cent; states- 33 per cent and local governments- 20.37 per cent.

Also in 2013, RMAFC promised to submit a new proposal to the president before the end of that year.

Its Chairman, Elias Mbam, gave the assurance in October of 2013 of “a new, fair, and credible revenue sharing formula that would be out before the end of this year.”

He attributed half of Nigeria’s socio-economic and political problems to the wrong formula adopted by successive administrations in the sharing of revenue in the country.

“If we are able to produce a revenue sharing formula that most Nigerians are happy with, over 50 per cent of what the national dialogue aims to achieve would have been done.”

“We have finished literature review, touring, public hearing, sensitisation and collected all our memoranda, and the next stage will be to analyse what we have, and that will be done during the two weeks retreat the commission will go from 28th of the month,” he said.

“At the retreat, we will produce the draft, which will then be confirmed by the plenary committee of the commission, after which we will print and forward accordingly to Mr President for approval.”

The new revenue sharing formula, the chairman said, would endeavour to reflect the responsibilities of each tier of government in the country – the federal, states and local governments, by considering the objective and subjective approaches.

Unfortunately, when the commission eventually completed work on the document in early 2014, President Goodluck Jonathan never replied a letter requesting audience by members to submit its proposals.

A source in RMAFC told the Nigerian Tribune, at the weekend, that “Jonathan shunned the commission. You know that our chairman was not a pushful person. After he waited for many months and the president was not forthcoming, I think he just sent the document with an accompanying note.”

Since June 2015, there have been various agitations for President Buhari to receive the document for onward submission to National Assembly.

During an oversignt visit recently, however, members of Senate Committee on National Planning and Economic Affairs, Musa Kwankwanso, promised to pursue an amendment of the Constitution to ensure that RMAFC would no longer need to submit its recommendations to the president for onward transmission to the assembly.