Setting a new revenue sharing formula

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160912F_Naira-notesAfter about two years of tortuous journey aimed at producing a new revenue sharing template for the tiers of government, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) will within the next two months deliver on its promise to give Nigerians ‘a fair, equitable and generally acceptable allocation formula that will meet the aspirations of the people.

The demand for a new formula has been a major issue in public discourse over the last decade as analysts, including political leaders and citizens at the sub-national level, believed the current formula had not only outlived its usefulness but constituted a major source of corruption in public governance occasioned by its structural lopsidedness.

The Federal Government currently takes 52.68 per cent of the allocations from the Federation Account while the States and the Local Governments share the balance in the ratio of 26.72 per cent and 20.60 per cent respectively.

Indeed, socio-economic experts have adduced the state of under-development and poverty in the country largely to the current ‘top-heavy, bottom- light’ revenue allocation arrangement which allows the Federal Government to have so much money in its vaults while the states and local governments have less and the welfare of ordinary Nigerians continue to suffer in the face of fi scal recklessness of the leaderships.

Worse still, rather than even spending the funds on people-oriented capital projects that would help in transforming the lives of the ordinary people and create a strong base for sustainable growth of the economy, the political leaders have in most cases turn Nigeria into their personal fi efdoms, appropriating the commonwealth on self-serving interests by either corruptly stealing or using the allocation from the Federation Account on personal assets and ostentatious living.

Even in the absence of scientifi cally verifi able data, it is generally believed that less than 20 per cent of the yearly budgets is committed to people-oriented programmes while the larger portion goes on recurrent expenditures.

As a means of ensuring that some of the fi scal profligacy at the Federal level is curtailed, many analysts have continued to agitate a restructuring that would get more funds to the other tiers of government where, in their opinion, the governments are closer to the people who, if abandoned, could naturally hold the leaders accountable for their plight.

It is therefore in response to the yearnings of the people and other interest groups that the RMAFC decided to conduct the current exercise with a view to entrenching some fairness and equity in the revenue distributions amongst the tiers of government and also use the new formula as corrective tool in the old structural defective fi scal federalism regime.

Speaking on the commencement of the exercise in the third quarter of 2011, Chairman of the Commission, Elias Mbam, said extensive consultations and other socio- economic statistical indices would be analysed so that what is produced at the end of the exercise would refl ect the aspirations of Nigerians and also support national drive to achieve improved developments at the grassroots.

Mbam, who disclosed this when the Governor of Gombe State, Ibrahim Dankwambo visited the Commission, said the Commission had a serious task to accomplish but assured the governor that the members were ready to serve the country to the best of their ability in the assignment and promised to give Nigeria the best.

He said: “We share be fair and just in handling the issue of revenue sharing as our actions or inactions will have serious impact in the development of the country. What we will come out with will be acceptable to majority of our people.

“We shall look at all indices relevant to the new revenue sharing formula based on their merit and dispassionately. We plead that all states give us the necessary support as we go round to collate these crucial indices by ensuring that all data provided are reliable and based on socio- economic realities of their domains”, Mbam assured.

Over the last months, the commission had been crisiscrossing the geo-political zones and organising workshops, seminars and other public enlightenment programmes in order to enlist the support of all stakeholders for the success of the project.

In addition to the formal fora organised in the variousgeo-political zones, Mbam has also been leading members of the Commission on leg walks to opinion leaders, experts and other interest groups as part of the Commission’s efforts to carry everybody along.

As expected, the journey has been rigorous and fi ndings more revealing to the commission that it ever anticipated. Political intrigues and other ethno-religious and cultural factors have featured prominently during the discourse in such a way that the earlier Q1, 2012 target set for release of the new formula became unrealistic. RMAFC had to shift the deadline by one year to address the issues thrown up by the primordial and political forces.

Despite all the hurdles, Mbam recently disclosed that the ‘sailing ship’ of the new revenue sharing formula has berthed and that what remained now was for the ‘sailor’ and members of his ‘crew’ to collate all they discovered during the ‘voyage’.

Looking at his countenance as he spoke, it was quite clear that the journey had been stormy but like every captain of any ship that survives the turbulent moments of his adventure, the Commission’s chairman and his other commissioners and legislators that visited former Head of State, General Abdulsalam Abubakar (rtd.), in Abuja for his advice, exuded confi dence that they will fulfi l their promise to Nigerians.

Speaking on the state of the exercise during an interactive session with journalists, the RMAFC boss explained that all that was needed from the fi elds to produce the new formula had been got and that release of the formula would be done before the end of the year.

Speaking on the outcome of the interactive session his delegation had with the former Head of State, Mbam, said the parley was fruitful as members were better informed on issues that would ultimately determine the outcome of the ongoing exercise.

According to him, the visit availed members of the delegation the opportunity to learn more about the materials that they needed to put into use for the exercise and assured that by the time the Commission fi nished ongoing consultations and all the inputs from all Nigerians were considered, the new revenue formula will refl ect the issues of the people and will also be sustainable.

Mbam, said the promise to deliver a new formula this year remained sacrosanct and that the Commission would work on the various inputs from stakeholders and its own fi ndings on the fi eld to meet the deadline earlier set for completion of the project.

He explained: “With this visit, we are more enriched with the materials that we use for the consideration of this activity, and I can assure you, by the time we fi nish all the consultations and all the inputs from all Nigerians, we’ll come up with a new revenue formula that will refl ect the issues of the people and will also be sustainable. I have not changed my position; I am saying we have a proposed new revenue formula by the end of the year.

“After this visit, next is to go into retreat and we will produce the result, we have all the materials, we have materials of all the responsibilities of each tier of government, their expenditure profi le, the revenue that accrues to them, and we are going to consider in that direction, what are the responsibilities of each tier of government and what we do feel is reasonable for them to accomplish that responsibility”, Mbam added.

In his remarks, General Abubakar, lent his voice to agitations by states and local governments for bigger shares in the Federation Account, saying that the Federal Government should hands off from certain responsibilities that ordinarily are better handled by the sub-national governments.

Specifi cally, he canvassed the devolution of responsibilities in some sectors like education and others by the Federal Government that could be better handled at sub-national level and touch directly on the welfare of the citizens at the grassroots.

He said: “I agree with Nigerians that the Federal Government is taking too much responsibility. I will rather see an un-dilution of the activities of the Federal Government. For example, federal government has nothing to do with secondary school education and neither does the state governments. I think this is the responsibility of our local government areas”.

As Nigerians look forward to the release of the longawaited formula, the questions many analysts are pondering over is, fi rst, will RMAFC meet the expectations of the sub-national governments for substantial improvements in their shares from the Federation Account?

Secondly, is there any assurance that greater funds at the disposal of sub-national governments will translate to real grassroots transformation?

These and many others are what only the political leaders can offer some answers.

 

Information from National Mirror was used in this report.

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