The House of Representatives on Tuesday unveiled plans to investigate the accuracy of data provided to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) by the 36 states and 774 Local Government Areas of the federation that was used to compute the indices utilised for vertical and horizontal revenue allocation including 13 per cent derivation from 2012 to 2021 and the current nature of maintenance of this data.
The resolution was passed sequel to the adoption of a motion titled: ‘Call to investigate the statutory functions of the RMAFC in the areas of revenue allocation, data collection and verification, provision of indices for disbursement to states by the Accountant General of the Federation and alleged infraction of administration of the Federal Ministry of Finance,’ sponsored by Hon. Mark Gbillah.
To this end, the House mandated its Committee on Finance, chaired by Hon. James Faleke to investigate the indices computed for each of the 36 states and 774 Local Government Areas of the federation by RMAFC from 2021 to 2021 that were transmitted to the Accountant General of the Federation for revenue disbursement to the states from 2012 to 2021 including the parameters utilized to compute the indices.
The Committee is also expected to investigate the indices utilized by the Accountant General of the Federation for revenue disbursement to the 36 states and 774 Local Government Areas of the federation from 2012 to 2021 including details of the actual amounts disbursed to each State for this period.
In the same vein, the Committee is to ascertain the actual amounts disbursed to the 36 states and 774 Local Government Areas of the federation from 2012 to 2021 from the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, as well as the allocation principles utilized by RMAFC in the proposal of new vertical allocation formula and consider efficacy and suitability of same in line with current and changing realities and the proposed principles for a new horizontal allocation formula.
The House also mandated the Committee to investigate the total remittance to the federation account by related agencies of the Federal Government from 2012 to 2021, the ‘cost of the collection’ deducted for the entire period, statutory backing for same and utilization from 2012 to 2021.
The Committee is also expected to ascertain the violation or otherwise by the Federal Ministry of Finance, CBN and other members of the FAAC in the administration of the Federation Account considering provisions of Section 162(3, 4,5 & 7) of the 1999 Constitution (as amended) and report back within 8 weeks for further legislative action.
In his lead debate, Hon Gbillah observed that “paragraph 32 of Part 1 of the Third Schedule to the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and Section 6 of the Revenue Mobilization Allocation and Fiscal Commission Act, 2004 outline the powers of the commission which amongst others include ‘review, from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities’ paragraph 32(b) of Part 1 to the Third Schedule to the 1999 constitution (as amended) further states that ‘provided that any revenue formula which has been accepted by an Act of the National Assembly shall remain in force for not less than five years from the date of commencement of the Act’.
“The House is aware that in performing its statutory mandate the Revenue Mobilisation Allocation and Fiscal Commission is responsible for the provision of a horizontal and vertical revenue allocation formula, the collection, verification, maintenance and usage of data utilized for the computation of indices for disbursement of revenue from the federation account with regards to the horizontal and vertical revenue allocation formula and indices for disbursement of 13% derivation funds by the Accountant General of the Federation. This data is required to be obtained from the 36 states and 774 Local Government Areas of the federation by RMAFC.
“The House is worried about Nigeria’s current utilization of the same vertical and horizontal revenue allocation formula and allocation principles instituted during a military regime three decades ago in 1992 when 6 States and 185 Local Government Areas were created and Nigeria’s population rose from 88 million to over 200 million, and the current national clamour for restructuring, devolution of powers and true federalism amid the obvious changing realities of insecurity and socio-economic hardships across the country contrary to the above mentioned statutory provisions including Section 162(2) of the 1999 Constitution (as amended).
“The House is also worried that RMAFC’s new proposal to the President in April 2022 for a revenue allocation formula is for vertical revenue allocation alone and is alleged to have utilized the over thirty (30) years old allocation principles and recent data that is inaccurate and unverified with no consideration being made at the moment for the more contentious horizontal allocation formula which determines the actual impact on the lives of Nigerians in the federating units and which is also alleged to currently being implemented with inaccurate and unverified data from which flawed indices are computed and utilized by the Accountant General for revenue disbursement other allegations are that the actual indices utilized by the Accountant General for revenue disbursement to the states are sometimes at variance with those provided by RMAFC because of inducement from the States.
“The House is also aware that the last time RMAFC claimed to have undertaken a comprehensive review of the vertical and horizontal revenue allocation formula which entailed collection and verification of data from the 36 States and 774 Local Government Areas of the federation was in 2012, which exercise was fraught with speculations about the accuracy and comprehensiveness of the exercise considering allegations that several states were not visited at all because of the lack of RMAFC’s capacity to do so.
“Consequently, there are doubts about the comprehensiveness of the recent exercise embarked upon by RMAFC in 2021 (almost 10 years later) that culminated in the submission of the new revenue allocation formula proposal to the President in April 2022;
“The House is concerned that the inability of RMAFC and the Presidency to provide a new and acceptable vertical and horizontal revenue allocation formula for adoption and enactment by the National Assembly at the intervals envisioned by the constitution appears to have resulted in the administration of the Federation Account by the Federal Ministry of Finance (FMF), RMAFC and other Federation Account Allocation Committee (FAAC) members in breach of statutory provisions of Section 162(3)(4)(5) and (7) of the 1999 Constitution (as amended) which implies that infractions have been committed and might require appropriate sanctions.
“The House is also concerned about allegations that certain states unduly influence RMAFC and the Accountant General of the Federation to their advantage in the provision and utilization of data and computation of indices and the utilization of indices for revenue disbursement respectively and the agitation by several states in the country about being shortchanged in revenue allocation considering the present realities in their communities and the significant deduction from remittances to the Federation Account by certain agencies of the Federal Government (which RMAFC has statutory power to obtain related information from) under the guise of ‘cost of the collection’ which does not appear to be statutory or properly monitored and determined by RMAFC and the National Assembly,” he noted.
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