SEARCH FOR EQUITY IN REVENUE ALLOCATION AND MOBILIZATION


BY EMMANUEL ONWUBIKO


One of the finest political campaign slogans of all times in Nigeria was the one that was used by the only Nigerian who won the office of the President of Nigeria but was never allowed to assume the office in the person of Chief Moshood Kashimawo Abiola.
The campaign slogan stated that Nigeria was on the March in search of the President who would inaugurate a regime of equity, equality of rights fairness and respect for fundamental freedoms just as the simple import of that slogan is that Moshood Kashimawo Abiola was the best President for Nigeria. Sadly, his pursuit of the top job remained an illusion not because of his failure to try but because of circumstances that were imposed on the people never to get the President of their choice by the military dictators.


He, Mko Abiola never made it to that high office of the President of Nigeria because the military Generals who are mostly from Moslem Northern Nigeria did not trust Abiola well enough to hand him over such a powerful office and the result was that he was left to die in detention from suspected unnatural causes which are still undermined till date.


That Campaign Slogan and the manner the man was never allowed to actualize his ambition, can be likened to the search for an acceptable revenue sharing and allocation formula for Nigeria which the Revenue Mobilization Allocation and fiscal commission has tried for nearly two decades with no success due to one disagreement or the other by political forces.
However, the current President Muhammadu Buhari who also recognized June 12th as official democracy day which was the date Mko Abiola fought and won the Presidency that became an utopian dream, has promised to deliver to Nigerians, a robust and widely acceptable Revenue sharing formula and has already provided the finances to the Revenue Mobilization Allocation and fiscal Commission to carry out a transparent, open and popular revenue sharing modus operandi and this commission that is headed by a fellow of the Nigerian society of engineers and a one-time finance minister, Engineer Elias Mbam has set the ball rolling in a fantastically transparent process. He and his Commissioners say they will deliver an acceptable revenue allocation formula for the Sovereignty of Nigeria to such a manner that there will be less friction and that it will be statistically and scientifically guided.


At the weekend, he met with select group of civil Rights Activists and a team from the Nigerian Guild of Editors during what they termed breakfast meeting during which time it was made known the extent the commission has gone to invite Nigerians to send in memoranda on how best to bake and share Nigeria’s national wealth. The ball is therefore in the Nigerian people’s court to contribute in shaping and working out the best Revenue Allocation and sharing formula.
He the Chairman of the Revenue Mobilization Allocation and fiscal commission gave a historical perspective of the search for acceptable revenue sharing formula in the following rational, logical and lucid narratives.
Hear him: “It is with great joy that I welcome you all to this interactive session. I thank you for sparing your time to be with us this morning despite your tight schedule. We consider this collaborative interaction imperative because we believe the ideas generated especially from the vibrant segment of the Nigerian society that has always been at the forefront of National development will assist our Commission to come up with a new revenue formula that will stand the test of time.

As you are aware, one of the major responsibilities of the Commission is to review from time to time, the revenue Allocation Formulae.

Specifically, part 1, paragraph 32(b) of the third schedule to 1999 constitution (as amended), empowers the Commission to review from time to time, the revenue allocation formulae and principles in operation to ensure conformity with changing realities, provided that any formula which has been accepted by an act of the National Assembly shall remain in force for a period of not less than five years from the date of commencement of the Act’.

The consideration for the review exercise was informed by the following;


i. The last general review of the Revenue Allocation Formula was carried out over twenty – eight years ago (1992);

ii. The Political structure of the country has since changed with the creation of six additional States in 1996, which brought the number of states to 36. Correspondingly, the number of Local Governments also increased from 589 to 774;

iii. There have been some considerable changes arising from the policy reforms that altered the relative share of responsibilities of the various tiers of Government including the, controversies over funding of Primary education, Primary health care etc.;

iv. Inadequate/decaying infrastructure and heightened widespread internal security challenges across the country;
v. Ecological challenges like global warming, desertification, flooding and population explosion;

vi. Inability of the current vertical Formula to adequately address the apparent mismatch between statutorily assigned functions and tax powers of each of the three levels of government; and

vii. Agitation for a review by various interest groups including States and Local Governments.

In view of the above, the Commission has commenced the review of the current vertical revenue sharing arrangement with a view to producing a fair, just, and equitable revenue sharing formula that will be acceptable to majority of Nigerians. The vertical formular deals with formular for the allocation to Federal, States and Local Governments.

You may wish to know that we have had similar engagement with your colleagues in Lagos, an In-house seminar and other outings and even a Press Conference with the Media in Abuja, sensitized with States and Local Governments and other interest groups. All these are aimed at harvesting viewpoints that will help enrich the process.

Ladies and Gentlemen, our Institution is here to showcase the trend of our journey towards harnessing ideas and view point including constructive criticisms so that we will come out with a thorough and robust report.

The current sharing formula is as follows;
Federal Government (Including Special Funds) – 52.68%
State Governments – 26.72%
Local governments – 20.60%
Total 100%
The Federal Government share of 52.68% is distributed as follows:
(i) Federal Governments Consolidated Revenue Fund (CRF) – 48.50%
(ii) Federal Capital Territory (FCT) – 1.00%
(iii) Development of Natural Resources – 1.68%
(iv) Ecological Fund – 1.00%
(v) Stabilization Fund – 0.50%

It is on record that the Commission had made several efforts to actualize the review of the Revenue Allocation Formula without its conclusion. Such efforts include;


a. Proposal for new Revenue Allocation Formula for the three tiers of government (Federal, State and Local Governments) was first made by the Commission in August, 2001 but the recommendation was withdrawn due to the compelling verdict of the Judgment of the Supreme Court on suit No. SC 28/2001 of 5th April 2002 which recognized the beneficiaries of the federation account as Federal, States and Local Governments.
b. In December 2002, another proposal for a new Revenue Allocation Formula was presented to the then President, Federal Republic of Nigeria. That Formula got to the verge of being passed, but again, the bill elapsed with the expiration of the tenure of the then National Assembly in May 2003.
c. Furthermore, in 2003, attempts were made by the National Assembly to reconsider the Revenue Formula bill initially submitted, but the efforts were not successful. However, an addendum to the original Report was prepared and resubmitted to the National assembly in September 2004.
d. The proposed Revenue Allocation Formula passed through several processes both in the senate and especially at the House of Representatives, where a public hearing was conducted in 2006 on the subject. Yet, the Formula could not see the light of the day.
e. Similarly, the Commission in 2014, made concerted effort to review the Formula. All necessary processes required of the Commission were concluded. However, the final process was inconclusive.
The review of the revenue allocation formula will involve the following activities:
a. Literature review of Revenue Allocation in Nigeria dating back to pre-independent period.
b. Study of fiscal matters relating to revenue allocation.
c. Invitation to memoranda from the Public sectors, individuals and private sectors across the country to allow for wider coverage.
d. Visitation to the 36 states and 774 Local Government Areas to sensitize and obtain inputs from stakeholders.
e. Wide range consultations with major stakeholders including leaders and Elder Statesmen.
f. Public hearing in all the Geo-political zones and
g. Administering of questionnaires

As was earlier stated, the Commission has commenced sensitization visits to States and Local Governments. The objective of the sensitization visit is to enlighten all major stakeholders including, the Executive, Legislature, Judiciary, Organized Labour and Civil Societies on the need to fully participate and make relevant inputs and submit memoranda to the process of the review.

Furthermore, the Commission has carried the following activities in the review process.
i) Literature review on Revenue Allocation Formula in Nigeria dating back to pre-colonial period.
ii) Advertised for submission of memoranda in the National dailies.
iii) Wide range consultation with major stake holders is also in progress.

Ladies and Gentlemen, I want to reiterate that the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is highly determined to produce within the shortest time possible, a new Revenue sharing formulae that will be fair, just and equitable to the three tiers of government. The Commission is determined to complete its review process by the end of 2021. I am glad to observe that the response so far from Nigerians is very impressive and demonstrates the importance the general Public attaches to the exercise.

Let me at this juncture emphasize that RMAFC’s desire as expressed above is to produce a reviewed Revenue Allocation Formula that is robust and equitable. This is why we decided to engage critical stakeholders like you to partner with us on this important national assignment.

Indeed, your role as watchdogs of the society will go a long way to attract varied and wide range of viewpoints from other respected stakeholders that the Commission wants to leverage for the benefits of the Country at large.
On this note, I call on the Civil Society Organizations and indeed all Nigerians to be part of this current exercise by making relevant inputs that will further enrich the exercise and give their unalloyed support for the Commission to actualize this
Thank you and God bless.”

*EMMANUEL ONWUBIKO is head of the HUMAN RIGHTS WRITERS ASSOCIATION OF NIGERIA (HURIWA) and blogs@www. theingerianinsidernews.com, www.huriwanigeria.com.

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