The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has announced the commencement of a comprehensive review of Nigeria’s revenue allocation formula to align it with the country’s current socio-economic realities.
This comes as stakeholders ask the commission to tie additional funds going to the states to specific projects to check reckless spending. Chairman of RMAFC, Dr Mohammed Bello Shehu, during a press conference yesterday, announced the review take-off, saying the last time a major review of the revenue allocation formula was carried out was in 1992, even though there have been several executive adjustments since 2002.
According to the allocation formula, 52.68 per cent goes to the Federal Government, 26.72 per cent to states, while 20.6 per cent is shared among the local governments. Shehu said the review aims to establish a fair, just and equitable revenue-sharing formula that reflects the current responsibilities, needs and capacities of the three tiers of governments.
“The ongoing review is driven by Nigeria’s evolving economic, political and constitutional landscape. Notably, recent amendments by the ninth National Assembly transferred several key responsibilities – such as electricity generation and distribution, railways and correctional services – from the exclusive to the concurrent legislative list,” he said.
He noted that the devolution of powers has placed greater financial and administrative responsibilities on the federation units, making it necessary to re-evaluate the existing fiscal framework.
“The Commission will embark on a thorough, data-driven, and inclusive process,” Shehu noted, adding: “This will involve broad consultations with critical stakeholders, including the Presidency, National Assembly, state governors, ALGON, the judiciary, civil society organisations, traditional rulers, the organised private sector and development partners.” He also noted that RMAFC would integrate cutting-edge research, empirical data and international best practices into its analysis.
“The review will assess service delivery obligations, fiscal performance, developmental disparities and economic capacities at all levels of government.
“Ultimately, our objective is to create a more balanced and sustainable fiscal federalism, one that fosters economic independence at the subnational level while ensuring equity and accountability in revenue distribution,” he said.
During the interactive session, Prof. Uche Uwaleke of Nasarawa State University, called for the ring-fencing of the extra-funds that would be going to the states so that the governors would not see them as extra resources they can spend at their discretion.
He said such additional funds should be tied to the funding of infrastructure, education, healthcare or other social services. On his part, the Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, who agreed with Uwaleke, called for the enforcement of local government autonomy as ruled by the Supreme Court. Otherwise, he said, any allocation to the local government would still be controlled by the state governors.
The Commission had made attempts, reviewed the allocation formula, and forwarded the same to President Goodluck Jonathan towards the tail end of his administration. But for unknown reasons, he did not transmit it to the National Assembly.
Another attempt was made under the late President Muhammadu Buhari. He also did not transmit the proposal to the National Assembly before the end of his tenure.
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