Wednesday, 10 August 2016

THE SEARCH FOR EQUITABLE REVENUE ALLOCATION FORMULAR

The search for an equitable revenue allocation formular for the three levels of government in the country has remained contentions over the years. As the revenue mobilization, allocation and fiscal commission (RMAFC) reviews the country’s revenue allocation formular, one begins to wonder if there is, indeed, any justification for increased revenue to the states. And on account of very poor performance, justification for the existence of most local governments is a lot more difficult than
finding out how much the federal government actually does for the people.

Under the current revenue formular, the federal government takes 52.68 percent, the state 26.72 percent, the 774 local government councils, 20.60 percent with 13 percent derivation revenue going to the oil-producing states. When the association filed a suit against the federal government over the jumbo pay national assembly approved for themselves, it argued that constituency allowances were raised without recourse to the RMAFC. 

This whole confusion faults the basis for fixing current salaries of legislators. If it was to shield them from political office abuse, the argument has been invalidated. However, the heat generated by the allowances has some how been diffused by the commitment of the leadership of the national assembly to review downwards their allowances. So, on the front burner now is the renewed concern over the revenue allocation formular. The current formular dates back to July 10, 1992, with the promulgation of “allocation of revenue (federation account, etc, Amendment, Decree of 1992).  However, a debate for a review of the present  formular organized by the revenue mobilization allocation and fiscal commission (RMAFC), has already kicked off with zonal public heating in the six (6) geo-political zones of the country starting with the north central zone in lafia, the capital of Nasarawa state of course, the revenue mobilization allocation and fiscal commission (RMAFC) by virtue of paragraph 32(b) part of the third schedule to the 1999 constitution of the federal republic of Nigeria (as Amended), is empowered “to view, from time to time, the revenue allocation formular and principles in operation to ensure conformity with changing realities, provided that any revenue formula which had been accepted by an act of the national assembly shall remain in force for a period of not less that five (5) years from the date of commencement of the Act”. 

There is no disputing the fact that the present realities in the country requires a comprehensive review of the existing sharing formular. In pursuance of the above constitutional mandate, therefore, the commission has commenced the process of reviewing the existing revenue allocation formular in line with section 162 (2) of the 1999 constitution (as Amended).
Undoubtedly the ongoing zonal public hearings mirror the controversial nature of Nigeria federalism and the importance attached to national revenue by the federating units.

In this case, we hope that the current hearings will come up with far-reaching recommendations that will be acceptable to the three tiers of government. Although, there are divergent views across the country and among different views across the country of the stakeholders on what constitutes an ideal formular anything short of realistic review of the present sharing formular will not confirm with changing realties in the country. One of those who recently voice his opinion on the matter is former president olusegun  obasanjo. His advice is that the sharing fromular must be proportionate to the responsibilities of each of the three tiers of government. According to him the items listed on the exclusive and concurrent list of the constitution must be quantified to determine how much of the nations resources should be allocated to each of the three levels of government. Furthermore, obasanjo told RMAFC officials who came to seek his view in abeokutato go beyond revenue allocation to find out what all the three tiers are doing to  mobilize revenue apart from the common collectible pool of funds.

In the extent, we agree with obasanjo the agitation for increase in revenue by any or all of the three tiers of government          can only be justified after the determination of the cost implications of the responsibilities assigned to each of team under the constitution. So far, this has not been the done. States and local government should also look inwards for alternative source of revenue and enthrone fiscal descriptive, during his administration (1999/2007) obasanjo did try to review the formular by submitting a RMAFC revised vertical allocation proposal to the National Assembly a sharing formular of 41.3 person to the federal government, 31percent for states and 16 percent for local government and special funds   11.7 percent. However the special funds shortly after became matter for litigation and was subsequently struck out by the Supreme Court, which decided that it was unconstitutional to make a provision for special funds in the revenue allocation formular.

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